I meant something like the Fed intervening to buy lots of bonds (including long-dated ones), without particularly thinking of YCC, though perhaps that’s the main regime under which they might do it?
Are there strong reasons to believe that the Fed wouldn’t buy lots of (long-dated) bonds if interest rates increased a lot?
Yes? 1/ it’s not in their mandate 2/ they’ve never done it before (I guess you could argue the UK did for in 2022, but I’m not sure this is quite the same) 3/ it’s not clear that this form of QE would have the effect you’re expecting on long end yields
I meant something like the Fed intervening to buy lots of bonds (including long-dated ones), without particularly thinking of YCC, though perhaps that’s the main regime under which they might do it?
Are there strong reasons to believe that the Fed wouldn’t buy lots of (long-dated) bonds if interest rates increased a lot?
Yes? 1/ it’s not in their mandate 2/ they’ve never done it before (I guess you could argue the UK did for in 2022, but I’m not sure this is quite the same) 3/ it’s not clear that this form of QE would have the effect you’re expecting on long end yields
They have bought longer term treasury bonds.