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- The latest central bank research on QT is careful, rigorous, and grounded in the literature
- Unfortunately its main conclusion – that QE affects markets while QT doesn’t – is at odds with the lived experience of most market participants
- There is a much simpler reason why QT has had so little apparent impact
- Misunderstanding of this dynamic greatly contributes to the likelihood of future policy mistakes
- Free-to-view replay of first segment of 16 Jan webinar
- Why strategists struggled in 2023
- A better way to think about markets
- Implications for 2024
- Hark! The VC angels sing
- God rest ye, merry crypto bros
- While PMs watched tech stocks take flight
- I’m dreaming of a tight market
- To be sung, please, in a spirit of global harmony
- It is often said that QE held down bond yields, meaning QT should be a major contributor to this year’s rise
- But the evidence for this is deeply questionable
- QE does indeed hold down real yields, through a portfolio balance effect
- But it also pushes up inflation breakevens via signalling
- What is missing so far from this round of QT is the historical fall in breakevens
- The true driver of higher bond yields lies with inflation, not QT
