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MarketWatch/Christine Idzelis/11-29-2022
“’There is a nontrivial probability that market liquidity will be adversely affected well before the targeted $2 trillion has been rolled off, preventing the Fed from accomplishing its goal,’ said Steven Ricchiuto, U.S. chief economist at Mizuho, in a note Monday. The Fed is letting its bond holdings, which includes U.S. Treasurys, roll off under quantitative tightening while also raising its benchmark interest rate as a primary tool to fight high inflation in the U.S.”
USAGOLD note: So……Mizuho believes that quantitative tightening should be shelved. It also believes, as revealed later in the article, that quantitative easing will never be revived. As such, it offers a novel approach that assumes the Fed might have a choice on either score. Events, not philosophy, in our view, are likely to carry the day.
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