URTY - QT Is Not The Opposite Of QE
The Federal Reserve has long been clear on the sequence of events as it innovated the playbook during the Great Financial Crisis. There would be a considerable period between when the Fed would finish its credit easing operations that involved purchasing Treasuries and mortgage-backed securities ((MBS)) and its first-rate hike. The normalization cycle would be well underway before the central bank would allow its balance sheet to shrink.
The early days of the recovery were weak, and a few rounds of asset purchases were deemed necessary before officials were convinced that deflationary forces were arrested