why deflation would be a disaster , page-79

mm, the FED's balance sheet runs in at over $3trillion so once QE buying ceases there is still the outstanding debt on the books.

Nothing must be done yet to repay the debt by repurchasing MBS and TBills. By their very existence on the FEDs books they are creating some form of stimulus - a static QE.

I believe it's something like 40% of securities purchased are on deposit with the FED. Those funds could be converted to cover assets held by the FED or the FED goes to market and sells to mop up liquidity or it sells it's bonds to the Treasury.

But it doesn't have to do anything yet.

There is very chance that the FED will continue with QE should inflation slip.

It's all pretty much a month by month wait and see. Considering that, the US economic power house is just above stall speed.