SPDR S&P 500 (SPY)

[etalors]

It could very well be about the fed decreasing the balance sheet. Currently they have about 8.5 Trillion on the BS. It got reduced by about 500 billion last year. This year, starting in January, the fed was going to start reducing by 95 billion per month or approximately 1.140 trillion in 2023. Still leaving us near the 7.5 trillion mark at the end of the year. We were at the 4.5 trillion level pre covid in 2020.

My point is that their balance sheet reduction efforts is a trickle compared to the way in which it was added. At this rate it will take until the end of 2026 to bring it back down to the pre pandemic levels. That is if they go that far. They may chicken out at the end of this year and come up with some lame excuse to stop or reduce the rate of reduction.

I would like to see them doubling their efforts in 2024 to 190 billion per month with a target of 5.5 billion by the end of 2024 and continuing in that manner till they reach 2.5 trillion.

We are hooked on easy money.