Is the changing Fed story something that should concern you, or is it just growing pains adapting to the massive balance sheet inherited from the unconventional policy QE?
The bigger a central bank’s balance sheet is, the more the government is involved in the production of money, and the less capitalistic an economy becomes.
Even though an inverted yield curve has just about a perfect record of predicting recessions, some believe that, because of the Federal Reserve’s unprecedented involvement in the economy, this time it will be different.
Quantitative easing (QE) became quantitative tightening (QT) in October 2018. That was when the number of treasuries and mortgage-backed securities (MBS) not being reinvested ($50 billion per month) by the Federal Reserve was close to the level of maturing treasury bonds and mortgage payments from homeowners.
Some states have severely underfunded their public employee pensions. This puts pressure on the politicians, as they need to either (1) go to the taxpayers to increase their taxes to make right on the pension promises, or (2) ask the public employees to give up an accrued pension benefit.
Debt in the U.S. government, individual, and corporate is much higher today than it was before the 2008 financial crisis.
If you’re concerned about your financial future, let’s talk