The fed has a nasty surprise for investors

The federal reserve isn’t just increasing interest rates this week, it’s also engaging in a process called Quantitative Tightening (QT), designed to remove liquidity from the economic system.

This is significant because this removes the so-called “Fed put,” where the market could always assume that the federal reserve would step in to save stock markets if prices went down too far.

Nobody knows how the market is going to react to this removal of liquidity, but it’s expected to be a big deal. The fed has never had $9 trillion dollars on bonds on its books, so this move is going to be a major disruptor in financial markets all around the world.

We are moving into unchartered territory, so stay focused and diligent.

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