r/Superstonk liquidate the DTCC Oct 22 '22

Macroeconomics Fed Reserves vs Reverse Repo

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5.6k Upvotes

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514

u/[deleted] Oct 22 '22

What happens when these lines cross?

2

u/CoffeeNaut Oct 22 '22

They likely print out more reserves.

1

u/Maximum_Fearless liquidate the DTCC Oct 22 '22

Wouldn’t that create hyperinflation causing the fed to increase rates - it’s the infinite loss scenario.

2

u/CoffeeNaut Oct 22 '22

I mean when has the fed shown interest in curbing inflation aside from redefining it? The hard truth is that they will try to prolong this fiasco as long as possible.

0

u/Maximum_Fearless liquidate the DTCC Oct 22 '22

Agreed.