Don't Call It QE — The Fed's $40 Billion Bill Purchases and Crypto Markets

Source: CryptoNewsNet Original Title: Don’t call it QE — the Fed’s $40 billion of bill purchases may not shake crypto out of its slump Original Link: The U.S. Federal Reserve cut interest rates by 25 basis points last week, but that may not have been the biggest news to bitcoin bulls. The real surprise was the central bank’s announcement to start buying $40 billion in short-term U.S. Treasury bills.

That sparked a bullish frenzy in the crypto community, and why not? These purchases will expand the Fed’s balance sheet, much as the 2020 Covid-era quantitative easing (QE) program and the post-global financial crisis maneuvers that fueled unprecedented risk-taking across financial markets, including in digital assets.

Not so fast, suggests popular pseudonymous observer Conks, known for his in-depth macro insights. In a blog post published Monday, Conks argued that while the latest operation looks similar to QE, it’s really not. The Fed action this time around aims to ensure healthy liquidity in money markets, where banks, corporations and investors lend and borrow cash for very short periods, typically overnight to a few months, to manage daily cash needs without locking up money long term.