Dude! Glad to see you posting again. The board switch has marooned a lot of posters. Hopefully everyone eventually gets back. As you pointed out QT ( Quantitative Tightening) is causing bank reserves to draw down.The Fed has reduced the pace of its balance sheet reduction but it’s still on a reduction mode. From what I read they are about to end the QT process, maybe by the end of the year. As you say, the Fed has indicated it will stop its tightening once we get to “ample” reserves. All a plan to reduce liquidity and suck money out of the economy. This tightening will increase short term rates and probably cause problems for lenders ( mortgage in particular).
Inflation is not going crazy, I’m still concerned that tariffs will begin to bite hard this quarter.
Lastly, the stock market keeps climbing even as many sound alarm bells and predict a huge correction (or even a crash). My buddy I share an office with has parked his money in short term CD’s since April because “ the crash is coming”. He has missed out on making a lot of money. Stocks and real estate seem way overvalued but barring a huge economic event I don’t see a correction coming. I’m still way too heavy in tech stocks, but it’s hard to divest when they are doing so well. Real estate is not dropping unless we see a major economic event and massive layoffs. Although builders are getting hammered in parts of Florida, Texas, LA. Austin, Tx buyers are finally figuring out that paying California prices in Austin was a mistake. I’m cool with my real estate investments, but stocks always have me on edge.
