Comment: Fairly simple

(See in situ)

Fairly simple

The banks have excess reserves. It means they have money which they are not lending out. The money the Fed has injected has gone in these excess reserves.

I don't know why they are keeping that money there and why the Fed isn't doing anything about it (charging them money to keep it stored at the Fed), but that's the answer. The money is essentially not in circulation.

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