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Market Watch Weekly | February 3 | 2022 Olympics: The Games Nobody Cares About.

Erik Dekker - Feb 04, 2022
The past few weeks have been eventful for both investors and markets. The much-anticipated FOMC and Bank of Canada (BoC) concluded on Wednesday last week: While neither central bank raised rates, both seemed poised to move in the March meeting...

The past few weeks have been eventful for both investors and markets. The much-anticipated FOMC and Bank of Canada (BoC) concluded on Wednesday last week: While neither central bank raised rates, both seemed poised to move in the March meeting, with the Fed also planning to end its balance sheet expansion in March, as well.

 

However, we’re still skeptical the Fed will move as aggressively as the financial markets are pricing in. If the Fed were really serious about the inflation fight, why didn’t it announce a sudden and early end to Quantitative Easing last week? Instead, the Fed maintained QE, which increases the size of its balance sheet, even as it released a set of “principles” for reducing the size of the balance sheet.

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