CPI up 8.5% Driven by Quantitative Easing over 14 Years. Fed Balance Sheet up 11 X to $8.9 Trillion

CPI (Consumer Price Index) up 8.5% year over year is being driven by excessive Quantitative Easing over 14 Years. The Fed (The Federal Reserve Bank) has increased its balance sheet by 11-fold. In 2008, it was $800 billion and just peaked $8.9 Trillion. Unprecedented, hence no one including the Fed knows how this will turn out. It is one big experiment with the Economy and People being the guinea pigs.

Quantitative Tightening has started with a delay. Federal Reserve Balance Sheet is down only $72 billion form the peak. Less than 1%. If the Fed follows through on QT, this is a big IF, the Fed’s balance sheet will shrink, bond yields will move towards market-based pricing and stocks will continue to struggle. With QT a possibility, the timing of China’s accelerated withdrawal from US treasuries will put additional upward pressure on interest rates.