Commentary  Markets reacted badly last week to Federal Reserve chairman Jerome Powell’s statements outlining the Fed’s initial forecast for the coming year. With inflation clearly no longer being “transitory,” with the Consumer Price Index accelerating to 7 percent in December, Powell has turned increasingly hawkish. Apart from seeming to confirm a series of rate hikes for 2022, markets were also shaken by Powell’s confirmation that the Fed would begin reversing its bond-buying program in March. The opposite of quantitative easing (QE), quantitative tightening (QT) will see the Fed begin reducing its now more than eight-trillion-dollar balance sheet (pdf). The reason for the move, as San Francisco Fed boss Mary Daly put it, is to give the Fed more ability to fight inflation without resorting to multiple 2022 rate hikes. With experts increasingly dubious of the U.S. economy’s ability to grow in a higher-interest-rate environment, beginning QT in March would seem, on the surface, an obvious thing to …