Is This The Pivot?
Has The US Fed Already Paused And Started To ‘Pivot’? Liquidity matters to markets: a fact that Wall Street’s fall through 2022 confirms. However, the recent sharp rally in stock prices hints that again there is more money around. Digging deeper into Fed operations shows that the effective QT (quantitative tightening) programme has stalled so far in Q4, even reversing to the tune of US$167bn of QE. This plainly goes against the tenor of Fed policy rhetoric and may support those (including us) who feel we may be close to a policy ‘pivot’? In practice, it is still too early to tell, but this move back to QE does evidence how hard it is operationally to remove liquidity, especially with the mighty Treasury market itself looking technically vulnerable. It will pay to watch this space. See our latest published research , Global View: Has The US Fed Already Paused And Started To ‘Pivot’? – November 2022