What the Fed’s Big Balance Sheet Unwind Means for Markets

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The Federal Reserve began to shrink its massive balance sheet after it began to unwind trillions of dollars worth of bond purchases it made to offset the effects of the Covid-19 Pandemic. It is not the first time that the Fed has done this. This time, it's different. The central bank is withdrawing monetary support at a rapid pace. The big question for markets now is what the impact of this liquidity withdrawal will be, and whether differences in the size and composition of the Fed's market operations make this bout of 'QT' different to previous episodes. In this episode, he walks us through the mechanics of the central bank's balance sheet unwind, explains how it might affect markets, and outlines all.