The Fed's accumulation of roughly a trillion dollars in assets — over half of it mortgage-backed securities — has injected an enormous quantity of excess reserves into the banking system, creating a serious risk that when the economy recovers and banks lend it out, substantial inflation will follow unless the Fed successfully removes the reserves in time.

forecastpending

Speaker

John Taylor

Evidence Quote

it's my worry for sure the alternative is the Fed will remove those reserves in time that's what your hope for I'm worried about it politically

Source

John Taylor on the Financial Crisis 07/20/2009EconTalk
Created: 6/15/2026, 9:20:12 AM

My Notes

Loading notes...