See the blue line, treasuries held. The Fed is actually buying short term notes, trying to keep short term rates low, as in lowering rates. But the red line, one year treasury rates, keep rising.
The Fed is not managing expectations, the Fed is pointing to this chart and asking us to read an XY chart properly. It cannot go on twisting the curve steeper, it will run out of long bonds to sell.
Who is raising rates then? Congress, mis-managing the budget in an election year. But what about those remits, remits grow when the Fed sells the long bond at a profit. But, the remits are a form of taxation on the bond industry and when Congress takes remits in the form of profits from Fed sales, then Congress is taking future tax revenue and spending it today. The Fed will soon run out of profitable long bonds to sell, and Congress is stuck until helicopter time.
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