One of the unintentional side effects of the current impasse in Congress over raising the debt ceiling is that it has led to a significant expansion of the monetary base. Indeed, the drop in the Treasury's operating cash balance over the past few weeks has bizarrely had a much bigger impact than the Fed's latest round of asset purchases. Given the criticism of QE2 when it was introduced, it is rather ironic that Congress has unwittingly unleashed what amounts to QE3.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services