Announcement
Super Grannies and Market Update – June 30 Webinar Cancelled

Quantitative Tightening Begins, Beige Book Mixed, Brainerd Makes Hawkish Comments

Well, it is the end of an era. For well over a decade now the Federal Reserve has been expanding its balance sheet, save the abortive effort to tighten in 2017-2018. On Wednesday, the Federal Reserve started letting assets mature from its historically high $9 trillion balance sheet. The exact outcome of the massive change in Fed policy is still unknown currently, and there’s frankly not a lot of useful historical analogs. Wells Fargo Investment Institute and many other analysts suspect that th

Well, it is the end of an era. For well over a decade now the Federal Reserve has been expanding its balance sheet, save the abortive effort to tighten in 2017-2018. On Wednesday, the Federal Reserve started letting assets mature from its historically high $9 trillion balance sheet. The exact outcome of the massive change in Fed policy is still unknown currently, and there’s frankly not a lot of useful historical analogs. Wells Fargo Investment Institute and many other analysts suspect that the sea change in Fed policy will be a headwind for stocks. Generally, it will reduce liquidity in markets. The purpose of quantitative easing is for the Fed to purchase low-risk assets and thus incentivize investors to increase their appetite for relatively riskier assets. Quantitative tightening is the opposite.

...

Finish reading this report for free

Enter your email and we’ll send the paywall-free link directly to your inbox

In addition to your unlocked report, you will receive our weekly market newsletter FSI Snapshot, as well as occasional updates and offers from FS Insight. You can unsubscribe at any time. For more information, see our privacy policy.

Get unlimited access to Tom Lee’s Fundstrat research Subscribe
Already a member? Log in
Disclosures (show)

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You are reading the last free article for this month.

By continuing, you agree to the Terms of Service and Privacy Policy.

Already have an account? Sign In

Trending tickers in our research

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You are reading the last free article for this month.

By continuing, you agree to the Terms of Service and Privacy Policy.

Already have an account? Sign In