A small cul-de-sac in a larger cul-de-sac

WASHINGTON (Reuters) - The Federal Reserve will stop shrinking its $4 trillion balance sheet later this year, Fed Chairman Jerome Powell said on Wednesday, ending a process that investors say works at cross-purposes with the Fed’s current pause on interest-rate hikes.

They dropped rates, then QEed a few times, and took the short cut backward by raising and selling,  at the same time. Now they will pause and let the tide catch up.  If it works, we get the muddle through, can kick on target.

But that jump in trade imbalance seemed scary, the stocks are wavering,  government on a tax hunt and yellow vesters in the wings. Housing is trending down, autos at end of cycle, and debt payments peaking.

But it is still, 'been there done that', nothing is jumping out, like a huge jump in oil prices. The one exception is the Narco State thing and trade, if that is not straightened out we get sudden stops because of the trade costs.