Indeed global central bank balance sheets have been expanding since October similar to the flip we saw in 2019. The result then: Equities rallied hard. The result now: The same. The world is not flat. It's global liquidity stupid. pic.twitter.com/p3vV8Shpbd
— Sven Henrich (@NorthmanTrader) May 17, 2023
But the Fed? What about the Fed? Their balance sheet sits at $8.5 trillion not even 6% from the all time highs and a mere $500B reduction in total having only taken out 10% of the $5 trillion they sloshed in following Covid. It's miniscule. pic.twitter.com/F2b4k6cAIp
— Sven Henrich (@NorthmanTrader) May 17, 2023
So what do you think they'll do when an actual recession hits? They'll go right back to expanding balance sheets like they always do. Mind you all this is happening with the lag effects of rate hikes not having manifested themselves fully yet.
— Sven Henrich (@NorthmanTrader) May 17, 2023