Fed may start shrinking its balance sheet this year, says Powell
Dow Jones2022-01-11
Fed's Powell: Fed may start shrinking its balance sheet this year. High inflation will last 'well into the middle of this year'.Omicron may cause a pause in growth but 'it should be short-lived'.
Dow down over 200 points as investors focus on testimony from Fed’s Powell.
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Most likely the shrinking of balance sheet will be later this year. Fed need to reduce its balance sheet. It had doubled after its unlimited QE that brought us out of the bear market during Covid 2022. Fed had to act fast to reduce its balance sheet while the economy is still good, else it will not have any chance later if economy start to weaken
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