The Canadian central bank ended QE overnight with no problem. The obvious reason they didn't do it is because they knew markets would decline 5-10% on the surp

The Canadian central bank ended QE overnight with no problem. The obvious reason they didn't do it is because they knew markets would decline 5-10% on the surprise. Which would actually aid them by curbing risk taking/speculation, raising the cost of borrowing. I do think Powell is motivated by his reappointment, so that's also playing into his inaction. It's just backfired at this point. We are clearly entering a wage price spiral. Wages rose an annualized 9% last month. To suggest even a 50 bp hike would put us anywhere close to aggressive tightening is just not true. The traditional thinking is that interest rates must exceed rate of inflation to be in a tightening policy regime. The Fed pushed job market past the natural rate of unemployment, and now the only way out is a hiking induced recession. Yet instead of trying to cut off this possibility early, they'll slowly plod along until it's inevitable. There was probably a chance to short circuit the spiral a few months ago.