You have QE/QT backwards. QE increases the money the Treasury sends to the Fed as coupon, which you said removes liquidity.
My entire point was that you are backwards in one of your two conflicting arguments.
EDIT: Maybe let's put it this way, the US pays off it's debt and no longer sends coupon payments to anyone. In your framework, that reduces 'liquidity.' But in what market exactly? The "systemic" market?
My entire point was that you are backwards in one of your two conflicting arguments.
EDIT: Maybe let's put it this way, the US pays off it's debt and no longer sends coupon payments to anyone. In your framework, that reduces 'liquidity.' But in what market exactly? The "systemic" market?