The FED’s QT(Quantitative Tightening) is almost 1,000 Days
It had been nearly 1,000 days since the Federal Reserve (Fed) began its quantitative tightening (QT). Time had flown by. During that period, the financial market had directly and indirectly felt the impact of QT.
When the Fed first announced its QT policy, the market responded with some tension. Interest rates began to gradually rise, putting pressure on asset prices. During that time, I closely monitored the pace of interest rate hikes and economic indicators while contemplating my response strategies.
As QT intensified, volatility in the bond market increased. With liquidity drying up, the stock market was also affected in the short term. Growth stocks, in particular, took a direct hit. During that period, I adjusted my portfolio by reducing my exposure to growth stocks and shifting toward dividend and defensive stocks.
As QT continued, the U.S. dollar strengthened, and the ripple effects spread to overseas markets. The currencies of emerging markets plummeted as global investors flocked to safe-haven assets. In this process, opportunities arose from currency fluctuations. I analyzed trends in the foreign exchange market and kept a close watch on the dollar index.
And now, nearly 1,000 days had passed. The prolonged impact of QT had accumulated, with signs of economic slowdown becoming more evident. Each time economic indicators showed a downward trend, I paid close attention to potential shifts in the Fed’s policies and reassessed my investment strategies.
he QT period thus far has been more than just a tightening policy; it has left a significant mark. Although the financial market has shown increasing resilience, many variables remain. Reflecting on this long journey, I’ve come to reaffirm that flexibility and consistency are crucial in investing.
The upcoming period will also be filled with new opportunities and challenges. I’m determined to continue my investment journey by reading the market’s flow and making informed decisions.