I think it means that the fed is trying to do everything it can to prop up the banking sector with out doing a rate cut. They still think as I do that inflation is a real worry. And they are trying to ease pressure to get liquidity up without adding to inflation with a rate cut.
Citi to the rescue!
Tell me if I'm wrong, but when the Fed "loans" money. It is increasing the amount of money in circulation by printing more, and if this is done when there is no need to cover an increase in economic output, it too fuels inflation. A higher interest rate is a brake on this, but too much lending would still produce inflation.
“And they are trying to ease pressure to get liquidity up without adding to inflation with a rate cut.”
I still think this is insolvency not liquidity that is the problem. Throwing all the money in the world and there’s a world of money out there, to solve the crunch is not going to solve the problem when the rules of lending have changed dramatically.
I wonder if TXU is a go or is the new lending world finally looking at outcomes?
You're right, but this is more about protecting their egos than inflation.