Former Morgan trader: The Federal Reserve's "reserve management" is essentially QE, and stablecoins are the real issue of monetary quality

2025-12-12 04:12:17

Abstract generation in progress

[CoinDesk] Former Morgan Stanley NFA Trader Jeff Park recently shared an interesting perspective: the Fed’s so-called “Reserve Management-Driven Purchase Program” is essentially still QE, just evolving from “quantitative easing” to “qualitative easing.”

Why do I say that? In the current system of ample reserves, reserves hold much more asset-liability flexibility than short-term government bonds because of the 0% risk weight in the LCR rules. No wonder the SLR rules suddenly eased before Thanksgiving, and even before QT was finished, a $40 billion monthly purchase plan was announced—talk about perfectly timed.

As Jeff Park puts it: Short-term government bonds can only be considered “approximate money,” while reserves are the true “perfect money.”

More importantly, he added that the most urgent “money quality” issue right now is stablecoins. This also explains why cryptocurrencies can never disappear—they are solving structural contradictions within the traditional financial system that can’t be bypassed.

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EthMaximalist

· 11h ago

Haha, it's really the same old trick with a new look. I've seen through the Federal Reserve's playbook long ago. Reserves are the truly perfect currency? Then what about stablecoins? Why haven't they started cracking down yet? QT isn't even dead yet, and they already added 40 billion. The timing is indeed a bit interesting. It seems that the real regulatory focus is on stablecoins. QE and those minor issues are just smoke and mirrors. However, short-term government bonds really don't live up to the word "perfect," unless you believe the Fed's nonsense.

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PonziDetector

· 12-13 00:20

Ha, it's another round of "changing the soup but not the medicine." The Federal Reserve's approach is truly clever. Reserve as "perfect currency"? Basically just printing money with a different name to deceive people. Stablecoins are the real issue. I agree with that. Traditional finance will have to face this crypto thing sooner or later. The timing is so rigid. If you say it's not intentional, who would believe it?

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GasFeeLover

· 12-12 06:06

Is it this set again? The Federal Reserve is just changing its name to continue printing money. It sounds impressive but essentially nothing has changed. I agree that reserves are the perfect form of currency, but are stablecoins really the problem? It seems more like a new centralized QE. The 40 billion timing is indeed perfect; I've seen this trick many times, and they always hit the mark precisely. The threat of stablecoins might be a bit exaggerated. I think it's more that the Federal Reserve is afraid of losing its voice. This guy is just saying the Fed is lying. I really like this straightforward analysis.

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ApeEscapeArtist

· 12-12 04:42

It's the same old story, just a different name—QE is still QE. The Federal Reserve's approach is truly brilliant; they time it with the precision of a fine instrument. The phrase "Reserves are the perfect currency" really hit the mark. The issue with stablecoins indeed needs to be taken seriously; regulation will inevitably come into play.

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DAOplomacy

· 12-12 04:40

ngl, the whole "QT ended before it actually ended" narrative is kinda becoming the governance primitives playbook at this point. SLR timing? almost too convenient to be coincidence, argued otherwise...

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FloorSweeper

· 12-12 04:36

ngl the fed's just rebranded their playbook... same qe energy, different label. reserves hitting that perfect money sweet spot while stable coins quietly become the real headache they won't admit to

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EternalMiner

· 12-12 04:35

To put it simply, the Federal Reserve is still playing the same old tricks, just changing the name to deceive people. The move to loosen the SLR before Thanksgiving was very transparent. Stablecoins are the real issue; this is what truly touches the core of the central bank. QE turning into quantitative easing is sounding new, but it's still the same old story. The triangular relationship between reserves, government bonds, and stablecoins is becoming more and more interesting. The $40 billion purchase plan came out of nowhere; the timing is really impeccable. It feels like current financial operations are just changing their appearance, but the essence remains the same. Stablecoins are indeed a major threat; no wonder the central bank is so urgent.

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GasFeeCry

· 12-12 04:19

I can't hold it anymore, the Federal Reserve is just changing the words to keep printing money --- So stablecoins are the real bombs? That logic is a bit absolute --- Wait, short-term Treasury bills are not considered real currency anymore? Then what do I have in my hand --- Jeff's words are quite bold, but it feels like they hit a nerve --- Qualitative easing haha, just sounds ridiculous, but essentially it's the same old trick --- Stablecoin risks are actually greater, the central bank should be most worried about this thing --- The easing before Thanksgiving, a $40 billion plan, the timing is so coincidentally perfect, it's quite interesting --- The reserve's risk weight is 0? Then this game can't be played anymore --- I just want to know when this will all end if it continues like this --- Perfect currency? Just listen, it's not true

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