The Fed is officially trapped.
For years, I’ve stated that the Fed would never be able to normalize policy.
As Japan has shown us, once a Central Bank embarks on the path of extreme monetary policy like ZIRP and QE in an attempt to “paper over” a credit bubble bursting, there is no escape.
Sure, there will be brief periods in which the Central Bank can tighten, but those soon end as it is forced to ease again to avoid the dreaded debt deflation.
The Fed just confirmed this yesterday. In case you missed it, the Fed’s FOMC minutes released yesterday reveal a Fed that is completely at a loss as to what is happening in the financial system.
Among other things, the Fed minutes revealed:
1) Fed officials are concerned that the Fed’s QT program might have been what caused the October-December stock market meltdown.
2) Fed officials are concerned what “market participants” (read: Wall Street) think of its policies.
3) Fed officials are happy to abandon any monetary policy that is damaging to stocks.
4) The Fed wants to end QT this year.
So the great Fed tightening, which was supposed to normalize interest rates and reduce the Fed balance sheet from $4.5 trillion down to $1 trillion has been abandoned after a mere 12 months.
By the way, the Fed was only able to reduce its Balance Sheet by a mere $500 billion… less than 20%.
So what comes next?
The Fed will be forced to ease soon. There is clear evidence the US economy is rolling over. And with the Fed already panicked about stocks falling due to its policies, it’s only a matter of time before the Fed starts cutting rates and ending QT for good.
Indeed, we’ve uncovered a secret document outlining how the Fed plans to both seize and STEAL savings during the next crisis/ recession.
We detail this paper and outline three investment strategies you can implement right now to protect your capital from the Fed’s sinister plan in our Special Report The Great Global Wealth Grab.
We are making just 100 copies available for FREE the general public.
You can pick up a FREE copy at:
Chief Market Strategist
Phoenix Capital Research