Op-ed by David Beckworth, includes “…The third reason some Fed officials want to shrink the large balance sheet is because it could take a loss in the future. Just like Fannie Mae and Freddie Mac were profitable for many years before going bust by borrowing short-term and investing long-term in mortgages, the currently profitable Fed could one day find itself in a similar situation. If that happens taxpayers would again bear the costs, as they did in 2008.”

comments powered by Disqus