RE:British gilts showed "no bids" and dropped 3% The Feds balance sheet at its peak was 8,950 Trillion $$ May 22, now it's reduced to (quite a while after QE was cancelled) 8,780 Trillion $$. So only a reduction of about 170 Billion $$. Now the Feds stopped QE in March this year, so in 6 months we've got about a 30 billion $$ reduction per month. Funny enough even when the Feds cancelled QE the balance sheet continued to rise.
Back to the present. If the Feds reduce their balance sheet back to pre-Covid levels Jan 2020 4 Trillion $$, yes in 2 years they printed almost 5 Trillion $$, there would be a liquidity crunch. So basically they are stuck with this large amount printed that can't be significantly reduced. This means if another crisis comes along to continue printing would mean the demise of the dollar which in turn would be even more inflationary.
The Fed, through years of bad policy decisions are stuck. They must be praying this short sharp jolt to interest rates has the desired effects without causing A) a major recession or B) Stagflation.
By keeping rates at zero and keeping them there for far too long Central banks (in most major industrialized nations) might just drive world economies into the dumpster. Also curious that they all followed the same policy (low rates) and nearly all mimicked Powells mantra. 'Inflation is transitionary'.
Oh no it isn't.
I understand there is a bill being tabled to return the US to the Gold standard which we all know will never pass for soooo many reasons.
So yes, agree with your research and talking about derivatives. All the security laws put in place to protect against major failures by financial institutions are slowly being eroded again by Republicans. Very strange why they would do this and once again put the banking sector in jeopardy through abuse of credit limits and increased speculation within the futures and derivative markets. The question begs why ? Is there personal gain in this for certain members of congress or senate via the lobbyists ??
And then there's Basil III, this should have had the desired effect of sending Gold higher but quite the opposite.
It's never been a secret that central banks dislike anything they can't control.