Smoke, Mirrors, and the 4.50% Shell Game As expected, the Fed held the federal funds rate steady at 4.50%. No surprise there. The “No Drama” Fed, as they call it—because nothing keeps the sheep calm like the illusion of predictability. But what they said—and more importantly, what they did—tells a darker story. Behind all the platitudes about “maximum employment” and “price stability,” the Fed made a critical change: it slashed the redemption cap on Treasury securities from $25 billion to just $5 billion. Translation? The Fed is pumping the brakes on balance sheet reduction. They’re quietly shifting back toward asset accumulation. In plain speak: they’re juicing the system again. It’s Quantitative Easing with the serial number filed off. A Dovish…
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