Did someone say QE3? Some hints:
Per bloomberg:
A credit-rating downgrade of U.S. Treasury securities caused by a failure to lift the $14.3 trillion debt ceiling would affect collateral pledged for loans.
The stalemate, if it extends past the Aug. 2 deadline, would probably create turmoil in financial markets, which could cause banks and other companies to hoard cash, William Poole, former president of the Federal Reserve Bank of St. Louis, said in an interview. If that happens, the Fed has the power to create new facilities to provide short-term funds to banks and other financial institutions, he said.
“The Fed could open the liquidity spigot,” Poole said.
MetLife Inc., the largest U.S. life insurance company, is hoarding cash as the debt deadline draws closer, officials said today. “We’ve added several billion dollars of excess cash, which we think is a prudent thing to do in an environment of uncertainty,” Steven Goulart, MetLife’s chief investment officer, said in a conference call with analysts. |
