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Economic Viewpoint

Is the Federal Reserve’s Balance Sheet Increase Quantitative Easing?

October 23, 2019
François Dupuis, Vice-President and Chief Economist
Mathieu D’Anjou, Deputy Chief Economist • Hendrix Vachon, Senior Economist

On October 11, the Federal Reserve Bank of New York announced that it would buy US$60B in Treasury bills per month at least into the second quarter of 2020. The official objective of this measure is to add liquidity to the money market to ensure its smooth operation and help keep the effective interest rate on federal funds within its target range. That said, this will increase the size of the Federal Reserve’s (Fed) balance sheet significantly, which will have the appearance of a quantitative easing program.