Why inflation is "the Fed's choice," how the interest rate tool vs balance sheet framework reshapes liquidity
Noice
The real shift here isn’t about policy — it’s about the Fed’s reaction function.
If inflation is framed as a policy choice rather than an outcome, then the system moves from reactive to managed.
What stands out is the combination of:
rate-based transmission,
balance sheet contraction,
and coordination with the Treasury.
That’s not tightening or easing.
It’s active liquidity management.
The open question is whether markets are pricing this as a genuine regime shift — or still anchoring to the Powell framework.
Hi here. nice to connect. I have subbed. Let’s support each other and grow together. Check out my last post on SOFI. Feedbacks appreciated https://valueinvestorfromitaly.substack.com/p/sofi-deep-dive-part-1?r=3qdo3i
Noice
The real shift here isn’t about policy — it’s about the Fed’s reaction function.
If inflation is framed as a policy choice rather than an outcome, then the system moves from reactive to managed.
What stands out is the combination of:
rate-based transmission,
balance sheet contraction,
and coordination with the Treasury.
That’s not tightening or easing.
It’s active liquidity management.
The open question is whether markets are pricing this as a genuine regime shift — or still anchoring to the Powell framework.
Hi here. nice to connect. I have subbed. Let’s support each other and grow together. Check out my last post on SOFI. Feedbacks appreciated https://valueinvestorfromitaly.substack.com/p/sofi-deep-dive-part-1?r=3qdo3i