The haircut is anticipated, and loan origination rates rise to cover it.
The same thing happened with Fed QE. Goldman Sachs simply estimated the seigniorage due and raised ten year rates on Treasury to compensate. I remember it well because I look at the chart and saw the ten year rate go up. We had thse dozens of economists all saying the rates went done until Jim Hamilton looked at the chart and verifies the Y axis gets large going up.
It was at that point I noticed a disconnect with many economists at the time. They were all reciting talking points, no one was actually looking at the charts.
It was at that point I noticed a disconnect with many economists at the time. They were all reciting talking points, no one was actually looking at the charts.
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