Max
@gachiguchi
Starting in April, the Fed will slow down the pace of balance sheet reduction from $25 billion/month to $5 billion/month. The Fed is actually signaling a soft transition to a more neutral policy.
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Max
@gachiguchi
Slowing down QT is a smart move that balances the fight against inflation and supporting economic growth. This could also be the first signal to lower rates in the coming months. Smaller QT ➡️ more liquidity ➡️ more favorable conditions for future rate cuts.
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Max
@gachiguchi
Easing QT will help stabilize the debt market. And on the agenda is refinancing the US debt, by $9 trillion. The Fed is trying to avoid a recession by allowing the economy to adapt to the new conditions of the “trade war”. Overall, the markets took a little breather yesterday on this news.
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