What a Six Trillion Fed Balance Sheet Signals Now

The Fed, Liquidity & The Slowdown Ahead: What’s Really Moving the Economy

From Laguna Beach at the California Mortgage Bankers Association retreat, KP breaks down the major forces shaping today’s markets — from weakening labor data to the Fed’s tightening cycle and the growing need for more liquidity in the system.

As quantitative tightening winds down and global central banks shift their stance, KP explains how the Fed’s balance sheet must grow with GDP, why the market continues to lead the Fed, and where consumers are starting to show real cracks — from ADP softness to rising long-term unemployment.

It’s an economy balancing slowing momentum and cautious optimism: cooling inflation vs. fragile spending, hawkish rate cuts vs. market resilience, and global policy changes vs. money flows searching for direction.

Episode Highlights:
00:00 – Live from Laguna Beach: CMBA insights & the state of the market
01:12 – End of QT? Why liquidity must expand as GDP grows
02:28 – Labor weakness: ADP slowdown, small-biz job losses & long-term unemployment
03:44 – Consumer fatigue: savings drawdowns, credit stress & shifting demand
05:02 – What to expect at the next Fed meeting: hawkish cut or pause?
06:20 – Global moves: Bank of Japan rate hike risks & shifting money flows
07:36 – Inflation & PCE: what the data really signals
08:48 – Market reaction: equities, crypto & the Santa Claus rally setup
10:05 – Housing & mortgage implications in a slowing economy
11:22 – Why the doomsayers were wrong — and what to watch next

Stay informed. Stay ahead. Stay in the market.
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