The Federal Reserve's Hotel California MomentSubmitted by Tradition Advisers on February 5th, 2019
The Federal Reserve is having its Hotel California moment.
The Fed began quantitative easing in 2008 with a balance sheet of $800 billion, growing to $4.5 trillion.
Even with quantitative tightening, the balance sheet will not be reduced back to normal levels below $1 trillion.
The Fed has paused on raising rates due to a slower economy in the 4th quarter.
While the economy has slowed dramatically from 2018, we still believe GDP will be up this year.