Normally, that would mean deflation (increasing value of the dollar). But, so much of the money supply is dead. Monetary base is at an all time high, but the velocity of money is at all time lows (or, at least post WWII lows...I haven't seen measures of it before then). If they are lowering the monetary base, I assume they are not pulling it back from "the wild" but from the unreleased reserves?...which should deaden the effects? Who knows; I surely don't.
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