Crypto Voices
Crypto Voices
Matthew Mezinskis
PE53: What was the Greenspan-Bernanke Put? (VIII)
24 minutes Posted Apr 10, 2023 at 2:59 pm.
Intro
Review of all-time high rates
Once the hard work was done...
Fed begins new 'Target rate'
Greenspan put
The birth of the housing bubble
Cracks in the system
Banks expect (demand!) lower base money rates
Fed funds now has lower and upper bound
0:00
24:31
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Show notes
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This is the fifty-third video installment from Porkopolis Economics, covering macro and money, from the creator of the Crypto Voices podcast.
Contents
Here we look at the Federal Reserve's weekly balance sheet versus its base policy interest rate in the 1980s until the Global Financial Crisis, which at this time morphed from being the Discount Rate, to the Fed Funds Rate.
If we look closely at the troubles of the GFC, we can actually see that the banks expect the Federal Reserve to cater to them, bail them out, and provide lower rates, as they are borrowing and lending around 100 bps below what the Fed was targeting for many weeks from September through December 2008. The Federal Reserve, eventually, indeed complied with this demand.
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