During COVID19 crash and recovery, US federal government and Federal Reserve injected to 10.6 Trillion USD to the market providing liquidity, which turned out to throw fuel on inflationary fires [SOURCE]
Now per Bloomberg, 7.6 Trillion USD has been evaporated in NASDAQ alone as of 05/13/2022 [Source]
From my understanding, I dont think this includes SPX/DJI, so perhaps, at this point, all the money Fed injected to the market since MAR2020 are simply deleted, if not more printed money from Fed, so is it still reasonable to believe inflation will go to peak?
So while I understand that the unlimited money injected to the economy can circulate in commodities sectors, what makes us think that inflation will still be continuous, when demand will be destroyed as Fed's intends to do so, especially when all the money are already spent and gone?
This is occurring even before Fed's balance sheet on QT and hike interest rates enough to what they call neutral rates (which all Fed members believe it's located somewhere between 2.0 and 3.0).
If Fed intends to take away liquidity in their balance sheet, like multiple investment report indicates, recession is near the corner and if so, commodities price can crash as light speed as any other big tech when demand is waning out, and if inflation rates is crashed and under control, isn't it another time to invest in big tech and ARK's related stocks (or Bond as well)??
Just a thought to think about to balance out between how much unlimited money from Fed has been injected to the economy since MAR2020 and how much market cap has been wiped out.
I dont have PhD in economy, so I dont know all, but my simple math suggests that all the money Fed injected are spent and there really is no need to do QT and interest rate hikes. But I have been wrong and will be wrong, (and most importantly, I dont have anything to say in decision making process) while Fed is highly determined to increase the rate hikes.
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