There’s no such thing as base money anymore by Waldman

But maybe not. Maybe we’ll see the light and enact a basic income scheme or negative income tax brackets. Maybe we’ll restore the dark, and engineer new ways of providing fraudulently loose credit. Either sort of change could bring “full employment” interest rates back above zero.

Do we ever rise from the floor? by Steve Randy Waldman

I’m less sure about the “someday end” thing. The collapse of the “full employment” interest rate below zero strikes me as a secular rather than cyclical development, although good policy or some great reset could change that. Regardless, if and when the Fed does want to raise interest rates, I think that it will not do so by returning to its old ways. A permanent institutional change has occurred, which renders past experience of the scale and composition of the monetary base unreliable.

Secular Development:

The negative unnatural rate of interest

Right now the Fed is buying $85 billion a month in mortgage back securities and long-term treasuries, to reduce their prices and ease credit conditions. They communicated that they will do this for while and they will keep policy accomadative until unemployment levels lower to 6.5 percent or so.