Monetary Movement
06/16/2021 |
The Fed is currently beginning a long road to monetary policy normalization. The Fed will first talk of tapering, and in early 2022 begin tapering its purchases of Treasuries and MBS. Next, in mid-2022 talk of raising rates will commence, followed, if all goes well, by several rate hikes starting in 2023. In 2024, I suspect the Fed will begin shrinking its $8 trillion balance sheet. What could go wrong?