Are The Central Banks About To Spoil The Party?
When will the central banks react to inflation? Well, some already are. Brazil, Russia, Mexico, Norway and Korea's CBs have already started raising interest rates.
Here in the US, the markets are focused on when the Fed reduces Quantitative Easing (the policy of buying bonds to put cash into the banking system.) But what if they started sopping up the cash in June with their Reverse Repo Facility? Investors are parking $1.2 TRILLION in that account! Did the Fed start their tightening cycle already?
Maybe we have a stealth tightening here in the US. Change my mind.
Robert Lloyd, CFA®
Chief Investment Officer
Lloyds Intrepid Wealth Management
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