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Quantitative Tightening and the Credit Crunch
This chapter discusses the belief among many people that quantitative tightening will not stop until the fourth quarter of 2024, indicating a longer-term higher interest rate environment. The hosts also address a listener's question about the relationship between running off the balance sheet and interest rates, explaining how the withdrawal of liquidity from the system can lead to a credit crunch and negative impacts on consumption and business investment. The chapter ends with a brief history of the term 'credit crunch' and its origins in 1966.