emerging markets fed fomc

Shaking The Tree: The Fed, ‘Overripe Fruit’ And A Half-Full Snifter

If you're a snifter is half-full (of Hennessy) type...

If you're a snifter is half-full (of Hennessy) type...
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3 comments on “Shaking The Tree: The Fed, ‘Overripe Fruit’ And A Half-Full Snifter

  1. So who bought all those bonds the last four market days of last week? Tightening my ass, US stocks were propped up with monster bond buying by the FED pushing the yield curve back well below 3%. The FED will keep this up as long as they possibly can, these markets should have blown-up in early 2016 but for BOJ and ECB $$$$ printing on an epic scale, again saving their masters, the “you know who”.

    The FED is tightening just like there is HARDLY any INFLATION, wake-up people you are being taken for the big ride.

  2. @Curt

    I fully agree. And this new higher “acceptable “ inflation range is just another idiotic explanation for stalling a more aggressive normalizing interest rate schedule. They will resort to anything and everything to keep the equity markets propped up for as long as possible. 2016 was when the US equity indices took on a new life from a statistical perspective. That was our window (USA) to normalize.

    Someone was meddling in the fixed income teapot last week. Call it “flight to safety “, or whatever, the Fed’s signature handprint was all over that move last week. And they are playing the game well. The indices are landing right smack at breakeven for most of last week. They know exactly where to land the rates to give the market breathing room.

    The only way we’ll get on the path to full normalization of interest rates is through force of hand, ie macroeconomic inflation will have to get to a point where the Fed is pushed into an inescapable corner, a corner much much tighter than the one they are already in. A corner with no other exit.

    US , EM and EU equity markets have been globally propped up by the CBs throughout, but 2016 was when things should have gravitated down.

    For the US: Tax cuts, continued cheap debt ( 10 years and counting!!), fiscal expansion, massive massive share repurchasing, tax fund repatriation. At some point these things will fall by the wayside. Massive accumulated debt would crush the markets right now if there was any inkling of a normalized interest rate rising up from the horizon…..

  3. Anonymous

    “had I not spent a couple of decades drowning the synapses in Laphroaig”. Ah, a genuine whisky connoissieur !

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