Countercyclical capital buffers as the Fed’s third tightening channel

Quick post here. In a post last week, I mentioned a speech Fed Governor Lael Brainard made on financial stability. And the key takeaway from that speech for me was that the Fed doesn't see rate policy as the correct conduit to maintain financial stability. Not once did Brainard talk about raising interest rates to ensure the integrity of the payments system. But she did talk about capital buffers. And I think that's significant.
Remember dual-barrelled tightening?
If you think back to when the...


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