Everyone “loves” this chart that tracks the size of the Fed’s balance sheet and the number of words in the Fed’s monetary policy announcements.
Except now it’s broken.
In his monthly chartbook circulated on Monday, Deutsche Bank economist Torsten Slok updated the chart following the Fed’s October policy statement.
In October, the number of words in the Fed’s statement shrank back to levels not seen since the Fed embarked on its latest round of quantitative easing.
Coincidentally — or maybe not — the Fed ended this quantitative easing program at its last meeting.