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BoE said it would purchase the country’s long-dated government bonds “on whatever scale is necessary” to stabilize its bond market after the U.K. government announced large tax cuts last week despite double-digit inflation.

Gains across U.S. stock and bond markets Wednesday suggest investors view the BoE’s emergency action as evidence the U.S. Federal Reserve won’t get much further in tightening monetary policy.

Some strategists are also predicting an imminent slowdown in so-called quantitative tightening, whereby the Fed is partially unwinding some of the trillions of dollars in bonds that it bought in response to the Covid pandemic.

First, the Fed won’t be able to keep raising rates aggressively as it shrinks its balance sheet, in part because the strength of the U.S. dollar, which owes partially to the Fed’s tightening, is driving chaos across global financial markets. 

Then, distress in the U.S. bond market is the one thing that would stop the Fed in its tracks, and what happened in the U.K. is an indication of what could happen in the U.S.

https://www.marketwatch.com/articles/wha...latestnews