TLT - The Tightening Cycle Begins

• Fed hikes rates 25bp for the first time since 2018. The FOMC also hinted a balance sheet run-off plan is in progress and could be announced next meeting.
• Previous tightening cycles and normalization efforts had been abandoned or paused numerous times by the Fed the last several years. Inflation will not allow that this time around.
• Policy tightening from the Fed may successfully affect downward pressure on US inflation (and asset prices) without derailing growth or causing a recession. In essence, the opposite of stagflation.
• This would be a winning outcome from the Fed's perspective, yet they also very well know, in the process of tightening policy, it could negatively affect financial market conditions and lead to a strong USD, risk-off environment.
• This is likely the catalyst I have been waiting and am positioned for. I expect tighter Fed policy to be a major tailwind for the Tri-Macro portfolio.

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