Could it Be the Fed’s Mega-QE Created so Much Liquidity that Tightening Doesn’t Work until this Excess Gets Burned Up?

One of the big surprises this year is that the Fed’s 5.5% policy rates and $1.1 trillion in QT have neither meaningfully tightened financial conditions nor slowed the economy. The Fed has been “tightening” since early 2022 in order to “tighten” the financial conditions...