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While traders are mostly focused on what the Fed will say about the coming rate liftoff, with markets today expecting just over 4 rate hikes by the end of 2022...
... a much more relevant question is what the Fed's balance sheet runoff - i.e., Quantitative Tightening (QT) - will look like both strategically and tactically.
As a reminder, two weeks ago Deutsche Bank predicted some $3 trillion in balance sheet normalization as the Fed undoes the emergency actions from the covid crisis which doubled the Fed's asset holdings from 20% to almost 40% of GDP...
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