Run(off) for the Hills?

Check out the accompanying pdf and chart collection. Executive Summary: It begins next month: the Fed’s plan to let its maturing securities run off its balance sheet without replacing them—a.k.a. quantitative tightening (QT). How right are investors to be freaked out? How legitimate are their suspicions that the Fed is erring on the side of overkill after having lost ground in the fight against inflation? … Today, we separate the fears from the facts and assess the likely impacts for the federal deficit, fixed-income markets, the stock market, and the economy. … Also: We lay out the runoff plan, review the last QT episode for insights, and put investors’ fears into perspective.