Turning Off the Taps

The folks over at Incrementum produced this excellent summary of central bank intervention by key participants over the last 15 years. The scale of money printing is mind-boggling and nobody knows the ramifications of their actions. It is safe to say that investment markets have been distorted to an extent never before experienced. I can’t imagine we will come out the other side without having experienced serious adverse consequences to the decades of central banker largesse. We have experienced the ‘benefits’ of trillions poured into the system. We are now about to experience the costs. Central banks around the world are now turning off the taps. QE moves to QT over the next 12 months. Markets are already reacting. Emerging markets are first to feel the pain and bond yields around the world are on the rise. Fed Chair Jerome Powell is talking tough and guiding towards a 3.0% Fed Funds rate next year. Let’s see if he gets there.

QE to QT.jpg

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