[Reuters]-US Federal Reserve Governor Kaplan said yesterday that the recent enthusiastic trade in GameStop shares was partly due to the large quantitative easing of the US Federal Reserve (FRB). He showed the idea that he was.
“The Fed continues to buy $ 80 billion in government bonds and $ 40 billion in mortgage-backed securities (MBS) per month, and it’s wise to admit the fact that it has a lot of liquidity,” he said in an interview with CNBC. .. He added, “There is no change in the idea that we should do the right thing in response to the new coronavirus, but if it goes too far, it would be better to limit liquidity and start normalizing policies.” ..
Kaplan has always expressed concern about excessive monetary easing. On this day as well, although there were no signs of financial system instability, he emphasized that as soon as the corona converges, it should take steps to reduce surplus easing. Meanwhile, Fed Chair Powell said at a press conference last week that discussions on reducing quantitative easing were premature and not as close as the relationship between easing policy and asset prices could be considered.
In the US stock market, 30 Dow Jones Industrial Averages rose by nearly $ 600 on this day. GameStop shares plummeted by more than 60%.
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