UGBA 10 Lecture Notes - Lecture 7: Quantitative Easing, Money Supply, Morgan Stanley
23 May 2018
School
Course
Professor
Federal Reserve February 5
I. Fed’s role
• Management of the economy (not in charge of it, we cannot manage it, but the
government does)
o Judicial has the least amount of influence in managing the economy
o Quantitative easing: create money to buy assets rather than using the cash that
banks deposits under the reserve requirements; buys a much wider range of
securities (ie: mortgage backed securities).
▪ QE ended in 2014; kept $1.7 trillion mbs (mortgage backed securities)
which is helping the market to keep the balance sheet at a constant level
• Management of the banking system
II. Functions of the Fed
• Goeret’s ad akers’ ak leds oey espeially i ties of risis
• Cotrols the oey supply: aageet of the atio’s eooi groth ad y
managing interest rates (ability to guide banks to lower interest rates).
• More people lending = good for the housing economy
III. Currency value and exchange rates
• Parity: equal value for 2 currencies
• US exports are expensive; consumers get good prices
• EU helped ith Greee’s akrupty
IV. Marketplae We do the uers
• Dow Jones Industrial: went up 183 points
• NASDAQ: went down 12 points
• S&P: went up 9 points
• Chipotle went down (e. coli outbreak)
• Loans going down and going bad: Morgan Stanley, BOA
• Bond prices fell
find more resources at oneclass.com
find more resources at oneclass.com
2
UGBA 10 Full Course Notes
Verified Note
2 documents
