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What Happens When the Fed Tapers?
What happens when the Fed tapers? That is the billion (or trillion) dollar question. Before we delve into the possible outcome(s) though, we must first understand what tapering means. In response to the coronavirus pandemic, the Federal Reserve slashed interest rates to zero in March 2020 to help bolster growth. It also began its $120 billion in monthly asset purchases, a program known as quantitative easing (QE) that has roughly doubled the Fed’s balance sheet to about $8.5 trillion since the start of the pandemic. images QE helps by reducing long-term interest rates, thereby encouraging borrowing to help spur ... (full story)
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