Translating today's monetary policy announcement from the Federal Reserve
Here's what the Fed's Jerome Powell just said, after scrubbing away the BS, fluff, and technobabble:
While a range of factors may have contributed to these developments, it is clear that without a sufficient quantity of reserves in the banking system, even routine increases in funding pressures can lead to outsized movements in money market interest rates. This volatility can impede the effective implementation of monetary policy, and we are addressing it.
Translation: Shit is hitting the fan, banks are about to fail, and we're the only thing that can stop a total collapse of society.
Indeed, my colleagues and I will soon announce measures to add to the supply of reserves over time.
Translation: We will soon add to the currency supply.
Our goal is to provide an ample supply of reserves to ensure that control of the federal funds rate and other short-term interest rates is exercised primarily by setting our administered rates and not through frequent market interventions. Of course, we will not hesitate to conduct temporary operations if needed to foster trading in the federal funds market at rates within the target range.
Translation: Certain banks/institutions are broke. We're going to conjure currency from thin air for them.
I want to emphasize that growth of our balance sheet for reserve management purposes should in no way be confused with the large-scale asset purchase programs that we deployed after the financial crisis.
Translation: We really prefer that you don't refer to this as QE4.
"We're broke, again. We're going to do what we did last time - inflate away the debt - and hope you don't notice the purchasing power of the dollar continue to disappear." - the Fed