The Federal Reserve has been under consistent leadership for the better part of two Presidential administrations. Its independence was certainly put under the test after it saw both supply and demand shocks following the financial havoc during the worst part of the Covid-19 Pandemic. But on a policy front, it took two separate timelines to establish just what was wrong with the US economy, and also pinpoint the way forward in terms of taxation-something Washington Politics hardly ever came to agree on. While Quantitative Easing (QE) is known by many in financial circles, Quantitative Tightening (QT) is a terminology just taking effect, with the Fed at the forefront of its social representation. This, in real terms, means the contractionary policy on behalf of the Fed-or any Central Bank-to cut spending for its balance sheet. In essence, it symbolises a fall/stabilisation in prices by boosting mortgage rates and federal funds rates, which in turn could help so many other measures of economic growth. In simple words, it’s cutting the money supply by no longer buying assets in a market but selling assets and encouraging investor confidence in a troubled economy. The fed is letting its bond holdings tick down, eventually heading to the 95 Billion dollars per month cap before making its deposits disappear. Total bank deposits have also seen a consistent fall; with investors looking to what will surely be volatility in stocks. High-interest rates coupled with more consumer spending with new retail ratings at above six per cent indicates a dire picture for the global economy, but a good picture for the quick recovery of the US economy. And at the end of the day, when the US economy grows, it takes the world with it. Of course, the last time this happened was after another financial crisis and the WTI investment into healthy supplies and good pricing for export. Total bank deposits have also seen a consistent fall; with investors looking to what will surely be volatility in stocks. Sales at department stores rose a staggering 17.5%, food services were at 7.2 p, while auto dealers closed at 6.4%. In short, the American consumer is still shopping and shopping non-stop, at better rates than a pre-recession time, as Americans continue to buy products that are American made. Main Street is likely to see a boom indicating growth through consumption. At the same time, consumers are running into more debt while it’s getting increasingly difficult for the government to pay off public debt. This clearly signposts that consumers now have knowledge of the economy and are vying to take matters into their own hands to establish a full recovery. In some cases, going against the Fed’s policies works out for employment numbers which are shattering forecasts. With President Biden and his economic team taking the lead to expand trade potential for American firms, the market sees greed being the formerly dominant force. Yesterday’s CPI rating was an understanding of where the US seems to be going with what it calls an economic recovery. US inflation slowed to 6.4 per cent, which is consistent with the slowing down of hiking prices. In instances–where core inflation may have been measured–costs of utility (oil) and the cost of food is being driven down. Though some analysts criticised the rating noting it used older housing rates data to balance the price sheet, which at the end of the day was not core inflation-a figure many are trying to grasp. In a statement following an update on the recovery and the uncertainty surrounding consumer confidence, Fed Chair Jerome Powell said, “If we continue to get, for example, strong labor market reports or higher inflation reports, it may well be the case that we have do more and raise rates more than is priced in”. Currently, we stand at 4.5-4.75 after a rate hike just two weeks ago. Many in the market expect interest rates to be anywhere north of 5 before the Fed ceases the QT policy, but some are worried it may be a long-term self-inflicted crisis. Returns-at the end of the day-are what attract investors. They care about economies, and they care about the overall financial environment for sustainability in the global market, but their return-driven behaviour is not selfish, it’s smart. Five years, 10 years down the line, QT could add to a worsening debt crisis for the US and could potentially be unavoidable, unless a major bailout is given over the next few years as injections into the economy. QT-however-does come tis own risk. There is a clear lack of liquidity which is very unsettling for lots of people. If investments in the stock and bond markets start to fall, or go in negative, with virtually everyone selling stocks before Wall Street greed takes over. A severe sell-off could further be accelerated by the artificial prices of bonds in other markets since many investors drove up the prices of bonds with demand-led growth. The Federal Reserve’s gamble with the monetary policy was largely successful, but it was the patience required to carry consumer expectations that brought it to the other side. While the team at the Treasury is seeing a mix-up, and the Federal Reserve seeing more officials leave to craft fiscal policy for the Biden Administration, Jerome Powell is persistent. He needs things to go his way if the US. wants to go back to normal by June of this year. The writer is a columnist and a linguistic activist.