The Economist on Fed Tightening
The Economist on Fed Tightening

An Economist Magazine email article said this about the US Federal Reserve's planned tightening:

The Federal Reserve is arguably the world’s most important investor. In a little over two years America’s central bank has more than doubled its balance sheet to nearly $9trn, helping to propel the economy through the pandemic. On Wednesday the Fed is expected to outline plans for shrinking those assets. The bank hopes that this “quantitative tightening”, coupled with interest-rate rises, will help it rein in high inflation without damaging the economy.
That will not be easy. Stingier monetary policy always stymies growth. And central bankers admit that they do not really know how quantitative tightening works, since it is a relatively novel part of their toolkits. The Fed is likely to lay out monthly limits on the pace of its asset reduction, hoping to make the process as predictable as possible. But for global markets already unsettled by risks from snarled supply chains to the war in Ukraine, it will be one more big source of uncertainty.
In life, unlike chess, the game continues after checkmate. Isaac Asimov  
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