Federal Reserve Quantitative Tightening takes Fed balance sheet back to what it was in October 2021
economy·@rose98734·
0.000 HBDFederal Reserve Quantitative Tightening takes Fed balance sheet back to what it was in October 2021
The news cycle moves so fast, that a lot of people have forgotten that the Fed foolishly carried out Quantitative Easing until March 2022, even though inflation had been above it's target for over six months. But still - Jay Powell finally got religion and started to reverse it and do Quantitative Tightening. Here's the chart:  [source](https://wolfstreet.com/wp-content/uploads/2023/01/US-Fed-Balance-sheet-2023-01-05-total-assets-detail.png) They've managed to reduce the balance sheet by $458 billion since the peak. But in order to reverse all the pandemic QE, they need to get rid of another $1.1 trillion. That will take at least another 18 months. The markets hate Quantitative Tightening - it's sucking out the liquidity that buoyed the stock market during the pandemic. But anyone who thinks the Fed is going to stop this year is deluding themselves. With China re-opening causing a renewed demand for oil and other commodities, inflationary pressures won't go away.
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