“The Fed’s last experiment in tightening failed with a 20% stock market crash in the fourth quarter of 2018"

Jim Rickards reminds us.

"When the Fed started QT in late 2017, they urged market participants to ignore it. They said the QT plan was on autopilot, the Fed was not going to use it as an instrument of policy and that it would 'run on background' just like a computer program that's open but not in use at the moment.

"It's fine for the Fed to say that, but markets had another view. Analysts estimate that QT is the equivalent of two–four rate hikes per year over and above the explicit rate hikes.

"Not surprisingly, we had the Christmas Eve Massacre in December 2018, and Fed chair Jerome Powell was forced to begin easing policy again.

"The Fed quickly backed off and began cutting rates and printing money (through QE) in 2019 and early 2020.

I think this is the likely scenario of how this saga ends. But I don't believe it will be anything imminent. For tomorrow, I think it is more likely we will see some sort of fireworks following Powell's news conference after 2 pm. This is what my crystal ball tells me😜😇