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Thursday, August 18, 2022

The Fed’s Moral Hazard Monster Is About To Lay Waste To “Wealth”

Authored by Charles Hugh Smith via OfTwoMinds blog,If the Fed set out to destroy the financial system, they're very close to finishing the job.If you set out to destroy markets and the financial system, your most important weapon is moral hazard, the disconnection of risk and consequence. You disconnect risk from consequence by rewarding those making the…

Here Is The Fed’s Taper Implementation Note

In addition to its traditional FOMC statement, the Fed also released an implementation statement regarding its rather dramatic change in monetary policy. It basically confirmed what we said earlier, namely that tapering begins in mid-November with a $10BN drop in TSYs and $5BN in MBS, then declining by $15BN every month unless something breaks.Here is…

Fed’s Bostic Finally Admits It: Inflation Is Not Transitory, And It’s Getting Worse

Atlanta Fed president Raphael Bostic finally broke away from the fake narrative bandwagon created by his Fed peers, the complicit media and Wall Street sycophants, when during a virtual speech at the Peterson Institute of International Economics, he said that price surges caused by supply-chain disruptions or the reopening of the services sector are likely…

Fed’s Taper Talk Tanks The Dollar, Oil, & Bond Yields; Stocks Puke

The Fed appeared to hint at tapering its massive bond-buying bonanza and markets went a little bit turbo. Gold and bonds rallied notably while the dollar dropped and stocks had no bloody idea what to do, so they collapsed...US equity markets shifted into chaos mode - despite all the gamma-squeeze ammo still available ahead of…

The Fed’s “Inflation Bubble”

By James Carson, former chief economist at Alliance BernsteinThe Federal Reserve continues to argue that the US is experiencing an "inflation bubble." Even though the uptick in consumer prices has run hotter and longer than policymakers expected, the "inflation bubble" will deflate at some point. Policymakers offer no timeline for the moderation but continue to…

Fed’s Beige Book Freaks Out Over Unprecedented Nationwide Shortages Of Everything

With the economy overheating, it will hardly come as a surprise that the latest Fed Beige Book - which found that the economy expanded at what the Fed absurdly called a "moderate pace" from early April to late May, at least clarifying that this was a "somewhat faster" rate than the prior reporting period -…

Fed’s Reverse Repo Hits All Time High $485BN As Reserves Flood System

We knew it would be a crazy day for today's reverse repo early this morning, when the overnight GCF repo rate traded at -0.01% and refused to rise, an indication that there was far too much money chasing good collateral.Looking at the scramble for repo, interbroker dealer Wrightson ICAP said on Thursday morning that it…

Fed’s Bullard Says 75% Vaccination Rate Would “Allow Taper Debate”… Which Could Happen In...

And just like that the Fed's open-ended tapering discussion became event-based.Speaking on Bloomberg TV, St. Louis President James Bullard said that getting three-quarters of Americans vaccinated would be a signal that the Covid-19 crisis was ending, a necessary condition for the central bank to consider tapering its bond-buying program.When pressed on when will it be time to…

The Fed’s Dot Game: “Something Missing”

Submitted by Joseph Carson, former chief economist at Alliance BernsteinThe Federal Reserve members' updated projections at the March 16-17 Federal Open Market Committee (FOMC) paint an optimistic economic view and an unrealistic monetary policy picture. Policymakers now agree with private forecasters that the US economy will experience in 2021 its faster growth rate (+6.5%) since…

The Fed’s “Catch 21”: BofA Explains Why Bitcoin Is 2021’s Safe Haven

In his latest Flow Show, BofA's Michael Hartnett has admirably - in one short paragraph - captured the Catch 22 dilemma, or rather Catch 21 as Hartnett puts it, that the Fed is facing:On one hand, vaccine + fiscal excess + bond issuance + inflationary boom = higher yields, which via tighter financial conditions can…
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