Jan
26

Fed Fortunes

Today, unsurprisingly, the Fed told us they will start raising rates on 3/16/22. Powell was careful to say the rate hikes are designed to reduce inflation, and hopefully not hurt labor markets. With labor supply so tight that should be doable. Markets were somewhat spooked about the Fed’s plans to shrink its huge balance sheet relatively expeditiously. If history is any guide, the reduction will be an autopilot driven non-event.

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