Larry Summers Isn’t Losing Sleep Over Bubbles But Yellen Leaving Would Keep Him Up At Night
“…if the ninth year of expansion with unemployment approaching 4 percent is not the time for above-target inflation, when will that moment ever come?”
“…if the ninth year of expansion with unemployment approaching 4 percent is not the time for above-target inflation, when will that moment ever come?”
And now back to your regularly scheduled rally.
Ok, well good news: we’ll get a break from potentially market-moving scheduled events this week.
“This puts the Fed in a terrible place”…
“This Fed transparency has become more of a liability than an asset. Instead of providing policy clarity, it creates confusion as various factions of the Federal Reserve board debate their positions in a public forum.’
“The Fed might be the trigger for tighter financial conditions, but not the cause (as we believe the risk-on phase is very close to being over).”
“The thesis that the Fed has made a policy error would seem to imply two claims: that the Fed’s hawkish stance has led to excessive tightening in financial conditions, and that this in turn has caused the economy to slow more than intended. Neither of these has happened.”
“This morning, at a speech at the BIS Annual General Meeting, Bill Dudley came right out and stated unequivocally that the Federal Reserve was targeting financial conditions.”
“In the current environment, we have the opposite situation. Either the economy rolls over (which should be bad for stocks), or it bounces, at which point the Federal Reserve continues on its tightening path (which could also be bad for stocks).”
“Traders need to remind themselves that you can’t win the war if you keep losing one battle after another.”
“Wasn’t it only last week that everyone was telling us that the market was fading the FOMC’s ‘policy error?'”
It’s about Dudley for the dollar which rose to a three-week high versus the yen
“Whether the Fed is raising rates too fast given their inflation mandate or not, they are raising them too slowly to contain asset price inflation. And while the FX market was getting a bit nervous, with falls for the RUB, ZAR and the TRY yesterday, the emerging bond market community was getting excited about 100-year, dollar -denominated debt issued by Argentina.”
Markets will get a well-deserved break from scheduled event risks in the days ahead after
“After many months of fighting all the naysayers predicting the next big stock market crash, I am finally succumbing to the seductive story of the dark side, and getting negative on equities.”
Ok, so the Fed is going to hike tomorrow. And the best part about it
Well, I’m by no means sure that anyone cares on a lazy, post-holiday-weekend Monday, but
Oh what a difference three days and one Dudley makes. See, you (and a whole
I am continually amused at the extent which a question comes up – let’s say
If ever there were a time when the phrase “that escalated quickly” was appropriate, this
“The question you need to be constantly asking yourself is whether any given move or news is fundamentally important or at the margin? Does it break new ground or is just a data point? Will there be some policy response or not?”
Earlier today, we brought you the latest from Bloomberg’s Richard Breslow, who warned that the
“No one knows how this is going to work in practice, let alone what it will do to markets.”
“One of the notable aspects of today’s Treasury-market price action — 10-year yields dipped as low as 2.33% — has been the flattening of the 2s/10s curve, which is now threatening its post-election lows.”
Escalating quickly over here…
Well, it’s Monday. Welcome to Q2. Things were relatively subdued in the overnight session, as
“The price action from New York Fed President Dudley’s no “great urgency†to hike comments was almost laughable.”
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