The Fed’s pledge to shrink its balance sheet as well as raising rates means something rare might be about to happen in markets: a shortage of buyers for some assets relative to supply.
The term “liquidity trap” has often been tossed around in Western markets over the past decade.
Central banks have provided so much funding for the financial system, through quantitative easing, that it seems that the glut was becoming ineffective.
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Financial Times
Gillian Tett is chair of the editorial board and editor-at-large, US of the Financial Times. She writes weekly columns, covering a range of economic, financial, political and social issues.
