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The Fed Is About To Drain Trillions In Liquidity: Here’s How It Will Do It

A map of the 12 districts of the United States Federal Reserve system
Image by Nkocharh;

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While traders are mostly focused on what the Fed will say about the coming rate liftoff, with markets today expecting just over 4 rate hikes by the end of 2022…

… a much more relevant question is what the Fed’s balance sheet runoff – i.e., Quantitative Tightening (QT) – will look like both strategically and tactically.

As a reminder, two weeks ago Deutsche Bank predicted some $3 trillion in balance sheet normalization as the Fed undoes the emergency actions from the covid crisis which doubled the Fed’s asset holdings from 20% to almost 40% of GDP…

To read more visit Zero Hedge.

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