If not a pivot, it was a significant shift in policy. The Federal Reserve’s official communique after its last hike earlier in March as well as the tenor of chairman Jerome Powell’s subsequent press conference was notably different from previous occasions. Two significant developments in March ushered in this shift: the failure of three U.S. banks and Credit Suisse show clearly that, after such a long period of excessively loose monetary policy, aggressive rate hikes will cause something to break. It would be fantasy to assume that no other financial institution is tottering on the brink. And then the response of the Fed and other central banks was to do what central banks always do with any problem, namely, throw money at it. In 24 hours, the Fed undid almost half of all the Quantitative Tightening it had undertaken over the past year. Again, it would be unrealistic to think they will not do this again. This dramatic shift comes before inflation is under control and as the economy slides into recession. The effect on the markets, particularly bonds, gold and the dollar, will be significant and long lasting.

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