Rates

The problem with raising rates is it takes a long time to take effect on the economy, jobs, housing etc. 

It affects the stock and bond market quickly, which should reduce the wealth effect.  However the stock market doesn't want to go down, cause it thinks the Fed will go right back to 0% rates and QE any day now. 

So the stock market is working against Powell. He refuses to change his hawkish tone while the stock market remains in Buy the Dip mode. Reducing the Fed balance sheet would have a much stronger effect on the stock and bond market. 

 ut he's just getting started on that.

2023 should be an interesting year.