by Wolf Richter
Wolf Street
Quantitative Tightening coming sooner, faster, and bigger, according to the Fed’s minutes today.
Markets were blissfully asleep late last year, and particularly in December, when the Fed became hawkish and made clear that it would move much faster than previously expected, and that there would be more rate hikes sooner, and that the balance sheet runoff – Quantitative Tightening – was already being discussed. And Powell came out after the FOMC meeting on December 15 and said that inflation was now a “big threat.”
And I came out and said at the time that this most reckless Fed ever – still repressing interest rates to near 0% and still printing money hand over fist, though at a slower rate – was “starting to get serious” about inflation. Upon which the markets laughed.