Good morning. The impact of the Fed’s QT, China on the brink of deflation, a no-confidence vote looms for Rutte. Here’s what people are talking about.
In the coming months, the full brunt of the Federal Reserve’s current quantitative tightening program is set to be felt. How it proceeds, and how the Fed handles the process, could shape its political latitude to keep using its balance sheet as a key tool in the future, amid Republican angst that was on display in Jerome Powell’s June 21-22 hearings. While Powell assured lawmakers the Fed is committed to avoiding a repeat of 2019 — when the repo market, a key part of US financial plumbing, seized up — Wall Street economists and strategists caution that QT remains complex and hard to predict.
