16min chapter

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Target, Preferred Stocks, Trump, and Mortgage Rates

Bloomberg Intelligence

CHAPTER

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.

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