Michael says the “Fed has no idea what they are doing.” Last year they said they would be quietly conducting quantitative tightening to lower their balance sheet and would be raising rates. Then a year later, having never reached 3.5%, they are now sending rates much lower. Their quantitative tightening program blew up the junk bond market, and now they are back to monetizing the debt just like any other banana republic would do. However, this time, they don’t want to call it QE because they have different “reasons” for doing it.
