Comment: Thank you Michael.

The lending HAS BEEN happening. That's what the QEs are. In this case it was lent to the banks who didn't lend it further (or didn't lend much of it further).

Yes, interest rates might go up, but there's literally TRILLIONS of QE dollars sitting in bank ledgers.

As you rightly point out, they make money by lending it further. Right now it's to offset the lost hedges they made.

If the risky bets the banks made tank and/or the government contracts spending, it can go deflationary.

If the bets dont totally tank or if the government really doesn't cut spending, whether or not rates go up, the money will get lent further, resulting in inflation.

This statement from the Fed was merely a signal that the unlimited spigot may not be so unlimited. It was intended to influence a reverse in the rate inversion.