[dangus]

It took FOREVER for the fed to switch from QE to QT. But they did. IMHO, QT is what must be done, to undo QE. Raising rates only cools of the housing market, killing ARMs and gives banks an excuse to take people’s homes from them. Or it puts small businesses out of business. It does not even directly affect corporations which raise funds from stocks instead of business loans.

I’m now investor class, so I say this against self-interest, but the only moral thing to do to kill off asset inflation is to QT. And that’s ONLY to undo QE. PPI is down about 7% since June. DEFLATION. (Not truly a deflationary economy but the point is that INFLATION has calmed, at least from the business perspective. CPI went nuts in January for some reason, but that will HELP profitability.)

[Tell It Right]

You and I are in 100% agreement. If I had my way there'd be no Federal Reserve, or at least a very limited one. But until that day comes, then yes, QT is very needed because the Fed's balance sheet is way too high. In fact, the Fed owns more U.S. debt that the SS does (which is more than China does, but that's another topic).

I, too, say that against my self-interest. I already have a low interest fixed rate mortgage that I'll never pay extra on because I get a lot more ROI in simple mutual funds. (Full disclosure, I'm currently out of all equity mutual funds, with a little extra in LT treasury funds because they tend to go up when the Fed lets the air out of the stock bubble.)