How long can it be before the Fed starts buying stocks en masse? A week, two maybe?
It's a trivial possibility / won't happen. My bet. As @unhygenicmacro said, there are other tools to do that job...and it's not even the right job. Fed is not opposed to stock market corrections which reflect actual truth on the ground. They're opposed to epiphenomena
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You're probably right. The difficulty comes when real effects start producing financial effects, which was what happened in 2008. I think most people didn't expect the Fed would buy CDOs outright either.
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If they judge the decline to be "irrationally large", and that this is having real negative consequences, it seems less crazy to imagine.
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