I’ve been harping on the critical importance of QT in fighting record inflation for a long while. The issue is-finally-getting some much needed attention from the financial press. This article just published by the Financial Times is the best, and most useful, on the subject of QT.
It includes calculations on how much tightening is needed as a combination of higher interest rates and shrinking the Fed’s balance sheet. The article calculates a QT of some $3.9 trillion plus a further hike in rates by 4.50%.
I think no one is expecting anything like that, certainly not financial markets. But if they started fearing anything near it… watch out below.