Treasury is the more appropriate lending conduit for dollar liquidity when geopolitical concerns dominate, while Fed dollar provision should primarily be targeted toward global stability objectives & be more insulated from short-term foreign policy motives, Adnan Mazarei & Maurice Obstfeld write.
Taking geopolitically motivated US swap lines too far would harm the dollar and Fed independence
Over the past century, the United States has provided dollar liquidity abroad through both the US Treasury and the Federal Reserve, but the appropriate mode of liquidity injection depends on the econo...
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