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Monday 28 May 2018

'Ever see a dog chase his tail?'

Contrary to common logic and consensus expectations, Fed rate hikes and balance sheet reduction will only exaggerate budding inflation concerns.
The economy has never experienced a sustained reduction in the monetary base of the magnitude currently underway. The path of QT and higher rates, that the Fed is currently on, will counter-intuitively increase inflation while reducing economic growth.

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