The Fed finally sees it too.
Quantitative Tightening coming sooner, faster, and bigger, according to the Fed’s minutes today.
Banks unloaded cash today for quarter-end window dressing. Money markets funds are biggest counterparties, Fidelity, Vanguard, Blackrock on top.
Billionaires got more billions, bottom half of Americans got peanuts and inflation.
But even the comparison to 1974 fails because back then, the Fed had already pushed short-term rates to 9%. Today: most reckless Fed ever.
Central banks jacked up rates to catch up with run-away inflation, but most fell further behind; only Russia caught up. The Fed didn’t even try.
Bond Markets will buy Hawkish Fed’s views just fine if the Fed stops buying bonds, period, and sells outright its TIPS, MBS, and long-dated Treasuries.
Inflation now a “big threat.” After downplaying inflation all year, the Fed is starting to get serious.
In the US, raging inflation is not far behind. But the Fed is still recklessly pouring fuel on it.
Looks like the start of a U-Turn on inflation. 2-year & 10-year yields jump.