Macro Moves

Powell's Balancing Act: Navigating the Footsteps of Volcker and Bernanke

Created on 28 Feb 2023

Wraps up in 11 Min

Read by 135 people

Updated on 02 Mar 2023

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Monetary policy is one of the most important tools available to governments and central banks to control the economy. At the heart of this policy are two key concepts: quantitative easing and quantitative tightening. These two tools are often used to stimulate or slow down economic growth, respectively, and can have a profound impact on everything from interest rates to employment rates. But what exactly are quantitative measures, and how do they work? 

Quantitative easing is a monetary policy tool used by central banks to stimulate economic growth and prevent deflation. Essentially, it involves the central bank creating new money and using that money to purchase assets, such as government bonds or mortgage-backed securities, from financial institutions. By injecting money into the financial system, quantitative easing aims to increase lending and investment, which can lead to increased economic activity and inflation. However, quantitative easing is a controversial policy that can have unintended consequences, such as contributing to asset bubbles or devaluing a country's currency.

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Rishabh Kaushik

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Rishabh is a finance enthusiast who is in a love-hate relationship with writing. Armed with a wicked sense of humour, he delivers jokes that land 50% of the time... Every other instance crashes and burns as he does after his lunch. To add more about this guy, he is into absurd comedy, can play the guitar (or so he says), and is a social pendulum.

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