One path in and another path out makes a loop

In late 2015, Treasury raised he one year rates. The Fed should have done nothing and continued to sell its it loans on balance. That would be taking the same path out it took in. The excess reserves would have left to fund the one year teasury market, the two together force the Fed back to the short end of the curve.

This is from a would should post by Selgin on the Fed. There is a chart I have:

See there, the Fed followed he One year rate on the way back out. That was a different path hen going in.

Treasury demand grew, that was when the Fed needed to expose the bankers to the new regime, kept IOER low, continued selling debt, flush out excess reserves and moved left on the curve, operate near the short end..

The Fed didn't, instead it followed the one year Treasury, which it always does. Look, lets be clear. Banker economists are limited in what hey can reveal, it is almost a legal requirement and we have gone over the constitutional issues on this, they are tough. But there is a natural course of events no subject to the double entry accounting constraints.

We do in fat, rescale at the Fed, and by our repeated denials, we generally end up doing it overnight.  The current law and current restrictions on accounting guarantee suddenness of some large natural event.  The build up on the contradiction is strictly Congress, and the Fed is strictly central banking. We need to bet the Nixon Shocks, keep them on account as hey are quite regular. Denialism does not back up the currency, it simply causes shocks intsead of processes.