So the big September Fed meeting has come and gone and basically no surprises. They held off on raising rates but the language implies it’s well on the table for December so hopefully that comes. As many of you know I’ve been quite critical of the Fed in the last several years for not raising rates fast enough. I’m not looking forward to seeing what happens if we enter the next recession when rates are this low. I totally supported the QE programs for the first 4 years. I felt without them the last financial crisis would have been extremely painful and drawn out, but enough is enough. That was nine years ago now, get on with it already.
So they seem to be intent on continuing the plan of beginning to unwind the 4.5 trillion dollar balance sheet accumulated over this quantitative easing era, although at a snails pace in the beginning. 10 billion a month to start won’t even put a dent in it, so I hope they ramp that up very quickly in the coming months.
I don’t mean to instill fear in anybody’s heart but man, uncharted waters for sure. And I can’t help but think the lowest volatility period in history is not exactly helping the situation.
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