Another credit squeeze is brewing as the unrealized losses on long-maturity treasuries keep deepening. QT and the Great Credit Squeeze The so-called narrative is that the Fed has gone guns blazing on inflation, which is way above the Fed’s target of 2%, so Quantitative tightening continues. QT2 started in the summer of 2022 and has …
Quantitative Tightening QT
Central bank Quantitative Tightening QT is the opposite, or inverse, of Quantitative easing QE, which entails the central banks adding liquidity to the system by purchasing assets, also known as balance sheet expansion. In the current age of central banks price discovery, the process of determining prices in the marketplace through the interaction of buyers …