For the second consecutive week the Fed took no action on its Treasury holdings, yet the central bank trimmed its mortgage portfolio. The Fed is playing at the margin as it continues to manipulate the markets and the economy. The Fed is not serious about QT. It is difficult to predict market fundamentals for 2024 when it is unclear what the Fed’s response to an economic slowdown will be and how aggressive Powell and his merry band of central bankers will be. One thing is certain, the United States would be better off with a free market capitalist system. One where the Fed did not exist.
