QE and the Inflation and Exchange Rate Myths

QE and the Inflation and Exchange Rate Myths

In Frances's second video on the mythology of Quantitative Easing (QE), she debunks common misunderstandings regarding inflation, exchange rates, and liquidity before explaining what QE actually is.
Overview

In part 2 of this series, Frances challenges a wide range of myths surrounding QE and inflation, exchange rates and liquidity. Overall, QE doesn’t significantly raise inflation, as shown in the Eurozone case, QE has little effect on the exchange rate, unless investors are being irrational about inflation, and QE does have the effect of providing liquidity to the market.

Key learning objectives:

  • What was the myth surrounding QE and inflation?

  • What is the myth regarding exchange rates?

  • What is the effect of QE on liquidity in the repo market?

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Summary
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Expert
Frances Coppola

Frances Coppola

Frances has spent 17 years working for assorted banks, retail and investment banks, and even a charity. During her banking career she designed risk management systems for Nat West, and financial & regulatory reporting systems for Midland Bank (now HSBC) and RBS Group. In 2019, she published a book on “people’s quantitative easing”.

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