Burns wrote: "The Federal Reserve was itself caught up in the philosophic and political currents that were transforming American life and culture… Monetary policy came to be governed by the principle of under-nourishing the inflationary process while still accommodating a good part of the pressures in the marketplace.” Related Reading: Bitcoin Whales Accumulate as Short-Term Holders Capitulate—What This Mean for BTC Hayes sees the same dynamic today, intensified by the government’s ballooning debt burden and the need to finance deficits at low yields.
"Therefore, I am confident QT, at least regarding treasuries, will stop in the short to medium term… Bitcoin will scream higher once this is formally announced.” QE Returns, Fiat Dies, Bitcoin Flies Hayes centers his argument on the Federal Reserve’s March FOMC meeting, during which Chair Jerome Powell suggested that balance sheet reduction—or Quantitative Tightening (QT)—would slow considerably.
We would look closely at letting the MBS roll off but keep the overall balance sheet size constant.” Related Reading: Bitcoin Weekly Preview: Tariffs, Whales, And Volatility Ahead This policy configuration, dubbed "QT Twist” by Hayes, implies that the Fed will reinvest MBS runoff proceeds into US Treasuries, thereby supporting bond prices while holding the nominal balance sheet steady.
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