The Fed's balance sheet has shrunk to 7.1 trillion, and the media is cheering for good news? Wait, let me explain!
The media is hotly discussing the Fed's balance sheet reduction. It seems that the market is in high spirits, but in fact, there are undercurrents. This year's balance sheet reduction of 1.39 trillion sounds good, but don't forget that the US Treasury has piled up to a peak of 35.3 trillion, and the interest bill exceeds one trillion every three months. The market debt is overwhelming!
Behind this, two major speculations have surfaced:
Stabilize the morale: The economy is in trouble, and good news is released to reassure investors not to panic. Induce takeover: The prelude of the big guys' shipments makes retail investors think that the market is booming so that they can come in and take over.
So, what do you think? What is the real reason for the Fed's balance sheet reduction? Is the market a blessing or a curse in the future?
Do you agree with the above views? Or have new insights? See you in the comment section, let's dig deep into the behind-the-scenes of the Fed's balance sheet reduction and the truth of the market!
