The Fed Just Really Spooked The Markets

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In this video, I discuss Fed governor Brainard's recent comments about the Fed rapidly shrinking its balance sheet. This bodes ill for stocks and other risk assets.

The Fed will keep hiking until something breaks (recession, stock market crash, financial plumbing bursts), and then will be forced to reverse course, turn the money printers back on, and grow its balance sheet to new highs.

The Fed cannot stop printing for long, since the US government cannot stop spending, and the Fed is the buyer of last resort for US Treasuries.

As the stock market and housing markets move down, tax receipts will also move down, requiring the US gov to issue even more debt. The Fed will be forced to buy this, too.

In the meantime, expect a great opportunity to buy more Bitcoin at lower prices.

Not investment advice! Consult a financial advisor.

Yield curve inversion:
https://www.youtube.com/watch?v=dgTTyt6ypZc&ab_channel=TraderUniversity

Brainard says Fed to shrink balance sheet:
https://www.bloomberg.com/news/articles/2022-04-05/brainard-says-fed-to-shrink-balance-sheet-rapidly-as-soon-as-may

George says Fed to consider balance sheet:
https://www.bloomberg.com/news/articles/2022-04-05/fed-s-george-says-rate-hike-debate-must-include-balance-sheet

Probability of 50 bps hike rapidly increasing:
https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

Hawks and doves at the Fed:
https://www.itcmarkets.com/hawk-dove-cheat-sheet-2/

Watch the Fed's balance sheet:
https://fred.stlouisfed.org/series/WALCL

Debt/GDP chart:
https://fred.stlouisfed.org/series/GFDEGDQ188S

Stock market cap to GDP chart:
https://fred.stlouisfed.org/series/DDDM01USA156NWDB

US debt clock:
https://www.usdebtclock.org/

FOMC meeting minutes coming today:
https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm

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#Fed
#StockMarketCrash
#Bitcoin

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