tion that is already well above their target level. The Fed is also perpetually worried about growth, which of course has nothing to do with inflation. After all, people working and producing goods and services can never be at the root of inflation.
The Fed has not been a buyer of US debt. To the contrary, its Quantitative Tightening program entails it to be a big disgorger of Treasuries. Now that the Treasury General Account is being refilled, the supply of Treasuries that the market must absorb is increasing. The PBOC may have to start selling Treasuries to support the value of the Chinese Yuan, which is down 14% against the USD since 2022, and is trading at a 15-year low.
The US economy should stumble hard in Q4 of 2023; or by Q1 of next year at the latest. The reasons for this are clear: Those spiking nominal and real interest rates, along with the net percentage of banks tightening lending standards, which have soared from -32.4 in Q3 2021, to 50.8 in Q3 of this year, should begin to sharply curtail consumption