For example, after running at about a 2-1/2 percent pace for several years, increases in owners' equivalent rent stepped up to an annual rate of 5 percent in the six months ending in August.
In a dysfunctional market where prices are not “discovered,” it is not so certain that a central bank is protected from credit risk, even if central bank lending is “collateralized.” That makes it difficult to distinguish liquidity provision from capital provision. Outright purchases of credit instruments imply that a central bank shoulders credit risk in a more straightforward manner.