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Trader: You’re Thinking About The Fed All Wrong
It's Thursday and former FX trader Mark Cudmore thinks you're underestimating the Fed's capacity to tighten policy.
Sure, realized inflation has yet to show a sustained move above target and yes, recent price action across the commodities complex suggests we're quickly headed into a deflationary death spiral thanks, somewhat ironically, to the PBoC's own tightening efforts, but according to Cudmore, it's all about financial conditions.
And you can probably surmise by the fact that the dollar
Oh dear
I suspect it’s Cudmore who is in fact ‘outdated and inadequate’ – it’s now accepted in the kind of heterodox thinking that anticipated the GFC that the scope & scale of liquidity creation embarked on by policymakers since the GFC is ultimately likely to cause the next liquidity crisis – even the Fed’s own researchers have acknowledged this.