The Fed’s Control Over Market Crashes
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The Fed has the ability to delay or accelerate a financial crisis by providing or withdrawing liquidity in the market. Their recent bailouts and credit lines surpass those from 2008 and indicate that they have complete control over when a crash occurs. A potential signal of an impending crash is a significant reduction in the Fed’s Term Financing Facility and Other Credit Extensions liquidity, typically through a repurchase agreement. [/s2If]
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