Transcripts of the monetary policymaking body of the Federal Reserve from 2002–2008.

The reason I ask—the point that I’m making—is that you can reference theories but, at the end of the day, it’s not just those predictions. It’s the whole range of things about the theory. We haven’t, in this, seen many theories put on the table, and the ones that have been—things like cash-in-the-market pricing—just don’t seem to match up well with the facts. There’s a gigantic, billions of dollars worth of investors out there who have the capability of buying any of this stuff. In Treasuries, people are capable of arbitraging that on-the-run and off-the-run thing. To explain this by appealing to some market segmentation seems really weak in this environment. You know, I welcome discussing theories under which these are Pareto improving programs, but I haven’t seen one that’s convincing yet.

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