``The Fed's decision not to buy new bonds will be just as much a form of tightening as raising interest rates. How come it's stimulative when they print money, but it's not contractionary when they make money disappear? The argument contains a basic contradiction. The contradiction leads to two results. One is that the Fed is engaged in happy talk and wants us to believe QT is not contractionary when it is. The other is that QT actually is contractionary, and we'll be in a recession sooner than later. Unfortunately, both things are true.''

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