Here we are fourteen years later. The detour has become the highway.

Keeping with the adage of “there’s nothing more permanent than a temporary government program”, this week, the Federal Reserve effectively threw in the towel on quantitative tightening, announcing that the steady runoff of its asset portfolio will halt.

Balance sheet reduction has ended—not with a bang, but with a nervous clearing of the throat. The same central bank that insisted it could unwind trillions in emergency asset purchases now quietly concedes that those assets are not going anywhere.

Ending QT is the clearest admission yet that the Fed has no realistic path back to pre-crisis monetary conditions. The balance sheet grew from just over $4 trillion to nearly $9 trillion during the Covid era, and rather than meaningfully reduce that footprint, policymakers are now floating the possibility that asset purchases could resume in the not-too-distant future. In other words, quantitative tightening may already be over for good. The new normal is the old emergency policy, relabeled as stability.

https://www.zerohedge.com/markets/no-way-out