Jerome Powell would have been incredulous had you told him back in mid-2018 that by the second quarter of 2020, he and his colleagues would be forced to answer questions about the relative merits of the Fed buying stocks and cutting rates below zero.
As hard as it is to believe, it was less than two years ago when Powell was busy piling rate hikes atop the tightening impulse from balance sheet run-off.
Ultimately, he managed to engineer the single-largest tightening (roughly 550bps) of any cycle in modern history, if you measure from the lows on the shadow rate.
Given that, it's hardly surprising that things went awry for emerging markets in the summer of 2018, and then for the developed world later that year.
But when Powell began to reverse course early in 2019, he had no conception of the extent to which the Fed's U-turn would end up morphing into the biggest easing push ever witnessed in the US.
That visual could simply be labeled "PANIC" and for many, if represents the end of the proverbial road.
Yes, the balance sheet will continue to balloon, but we're in cartoon territory at this juncture, and when it comes to the policy rate, the market is likely to kee
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