Some Academics Talk About Inflation vs Deflation26 Mar 2020 15:49
First link is pretty basic and second link gets very specific
https://www.brookings.edu/blog/up-front/2020/03/25/where-is-the-u-s-government-getting-all-the-money-its-spending-in-the-coronavirus-crisis
https://www.brookings.edu/research/fed-response-to-covid19/
Central banks: The Federal Reserve can and does create money, and it can and does use that money to buy government bonds. That’s what the Fed did during the Great Recession of 2007-09, and that’s what it is doing now. To be precise, the Fed isn’t giving money directly to the Treasury. The Fed is, in effect, buying government IOUs (Treasury bonds) from private investors or foreign governments who have lent money to the Treasury. But, of course, the more the Fed buys, the lower the interest rates that the government has to pay on new borrowing, and the more the U.S. Treasury can borrow overall without pushing up that interest rate.
Securities purchases (QE):The Fed has resumed purchasing massive amounts of securities, a key tool employed during the Great Recession, when the Fed bought trillions of long-term securities. Treasury and mortgage-backed securities markets have become dysfunctional since the outbreak of COVID-19, and the Fed’s actions aim to restore smooth market functioning so that credit can continue to flow. The Fed initially said it would buy at least $500 billion in Treasury securities and $200 billion in government-guaranteed mortgage-backed securities over “the coming months.” But, on March 23, it made the purchases open-ended. In the first week of the new program alone, it said it intended to purchase $375 billion in Treasury securities and $250 billion in mortgage-backed securities. To help finance multi-family housing, it also expanded purchases to include commercial mortgage-backed securities. And, it issued forward guidance to reassure markets that it will “purchase Treasury securities and agency mortgage-backed securities in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.” Although the Fed is not calling it “quantitative easing” (QE), everyone else is calling it that.
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