FED will continue QT, but that is difficult for them to reduce. Once money printed and spread across economy, it is hard for them the rewind.
Think this way, how are they going to sell MBS or TRSY: They bought lot of MBS with 3.25% interest rate. Now, if they want to offload, who will buy them? Since this is money printing, they need not recirculate the money they receive when mortgage is paid off.
Rate hike is work now, but they may not go back to 0.25% but stay above 2.5% (inflation neutral) level. Essentially, rate hike has some permanent effect also.
Just like real estate short sale, low rate 3.25% is going to be history now.
None of this is good for the economy. I saw a sign that said, “Stop inflation. Don’t buy it.” I think that’s starting to happen to entire categories of goods and services as people feel the pain of inflation. I don’t think the Fed is going to blink, so this is going to be a crash landing. It’s the only way to get inflation under control.
Liz Truss will become the shortest-serving prime minister in British history, after announcing her intention to resign just six weeks into a disastrous term that pitched Britain deep into political and economic turmoil.
With persistent inflation eating away at wage gains, more Americans are struggling financially.
Meanwhile restaurants are full and can’t find enough staff. And Americans are traveling overseas in record numbers and swamp tourists’ areas. Airfares are Luxurious goods are in short supply.
This is classic K shaped recovery and growing wealth gap in the country. Half of the population is struggling and other half swimming in money. This is mostly due to Fed. Fed has been bailing out asset holders since 2008 repeatedly by artificially suppressing the interest rates on one hand (helping the rich half) and forcefully creating inflation on the other hand (screwing the poor half).
Such policies over long periods of time leads to civil unrest and arrival of Nazi like leaders. We already have some Dems starting to behave like one.
Luxurious goods are in short supply.