FOMC Minutes Signal Bigger, Faster-Than-Expected QT, Multiple 50bps Hikes

April 6, 2022

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Members of the Board of Governors of the Federal Reserve System and staff gather for a meeting on enhanced standards for large U.S. and foreign banks. The event took place in Washington, D.C., on February 18, 2014

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Fed Minutes more hawkish than expected on rate-hikes and QT:

As much as $95 billion in asset runoff per month ($60-90 bn exp)
Many Fed officials say half-point hikes may be warranted
Fed sees need to get to neutral posture 'expeditiously'
Fed fears public loss of confidence in is resolve over inflation

Ian Lyngen at BMO had a great take after the minutes:

“If the Fed is going to bring rates swiftly to (and through) neutral, we’re apprehensive that this cycle’s terminal will persist for a truly extended period before the realities of the recovery will require lower policy rates; fine tuning or otherwise.”

In other words - if The Fed follows through on this, recession will swiftly follow (along with market chaos), which will likely force The Fed to fold long before achieving its goal (and escalating its anxieties over losing the public's confidence).

The only question is how negative rates will be in 2024/25...

To read more visit Zero Hedge.

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