In 2021, people here said Powell would never end QE and he’d never hike rates, and if he tried a little bit, the economy would collapse. Now he has hiked to 5.5%, highest in decades, and produced the biggest QT ever by far. Inflation has come down a lot, from 9% to 3.5% (CPI). So that was a pretty good job. But he didn’t finish the job, and said many times that the job wasn’t finished, and now inflation is going back up. But no one knows for sure where this is going. Inflation is impossible to predict.

The last thing I would want to see, given the huge government deficits during a booming economy, is for the economy to crash, which would totally blow out the deficits. I know there are people here who’d love to see 10% interest rates, 10 million unemployed, economic chaos and mayhem… but let me tell you, that would restart QE and ZIRP all over again, and that’s the real enemy, though Wall Street would love nothing more than that.