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A Word About Tapering and Who the Fed is In Bed With

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16 comments on A Word About Tapering and Who the Fed is In Bed With

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Tapering

At long last the world presumes the Fed will finally taper.

Hike After Tapering Complete? 

How long will that take?

What About Fed Chair Jerome Powell?

Hey, thanks for asking.

What’s the Troika?

My comment regarding the Troika pertains to a comment made by former Fed Chair Ben Bernanke.

He once stated the only three opinions that mattered were those of the Fed Chair, the Vice-Chair, and the President of the New York Fed.

Currently that would be Jerome Powell, Richard Clarida, and John Williams, respectively.

New Troika

Given there is no independent Fed and Powell may be replaced if he does not go along with Biden Administration wishes, it is more realistic to think of the Troika as Powell, Treasury Secretary and former Fed Chair Janet Yellen, and President Biden.

“Powell will either hop into bed with Biden and Yellen or he will be replaced.”

Progressives right now are putting pressure on Biden to replace Powell with someone more to their liking.

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16 Comments
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El_Tedo
El_Tedo
4 years ago
*whom the Fed is in bed with. 
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Casual_Observer2020
Casual_Observer2020
4 years ago
OT. 
These Maps Tell the Story of Two Americas: One Parched, One Soaked

By Aatish Bhatia and Nadja Popovich Aug. 24, 2021

The country, like most of the world, is becoming both drier and wetter in the era of climate change. It depends where you live.

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Casual_Observer2020
Casual_Observer2020
4 years ago
OT – Calling it here. The Biden administration is lost at sea. You come in touting competence and sanity and bungle the pullout in Afghanistan so badly that it makes the last 3 presidents that mismanaged Afghanistan look highly competent, accurate and precise. It literally looks like this administration forgot we were even in Afghanistan and woke up one day found out we were and decided we shouldn’t be. 
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StukiMoi
StukiMoi
4 years ago
Reply to  Casual_Observer2020
“…found out we were and decided we shouldn’t be. “
And that is all which matters. As US policies in the DumbAge goes, that one was pretty fly for a senile guy.
“We” should no more be there than “they” should be here (if anything, we have less business thee than they have here).
Any possible permutation of simply waltzing out of there, regardless of how it is done, is an improvement on any possible course of action which does not involve waltzing out of there. 
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anoop
anoop
4 years ago
tina, fomo, btd.  or have fun staying poor.  your choice.
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Captain Ahab
Captain Ahab
4 years ago
Given that Fed. Gov’t deficit spending is vast and unstoppable, and any significant increase in the (bond) interest rate from effectively zero will 1) drain tax revenues and/or require even more bonds to pay interest on bonds,  2) send markets plummeting, 3) decrease tax revenues as the US goes into steep recession…. is there really a choice except more of the same, and PRAY?
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StukiMoi
StukiMoi
4 years ago
Reply to  Captain Ahab
“is there really a choice except more of the same, and PRAY?”
Yes. End the Fed. $20/oz Gold. Default on all debt (fat chance paying any of it in Gold at $20/oz….). Quick, easy, widespread, cheap and final bankruptcy. Done.
Factories, equipment, houses, arable land, industry, forests, oil, fisheries, and people’s skills and knowledge all remains. And the debt gone. Which is all that matters.
The other various XTF, NTB, GDP blah-blah-blah supposedly scary hobgoblins are, as Mencken pointed out, all imaginary.
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1-shot
1-shot
4 years ago
Based on your FED Balance Sheet graph, since 2009 the higher the more assets the FED holds, the higher the prices of stocks, bonds and real estate go. Keep buying! Just make sure to do it using 100 year bonds at <2%
And BTW, why try to predict what the FED is going to do.  They’ll tell us themselves.
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Mish
Mish
4 years ago
Reply to  1-shot
Dear 1-Shot 
Have you looked at a dot-plot of Fed Projections of what they will do?
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Cocoa
Cocoa
4 years ago
Reply to  Mish
Jawboning expectations is part of their market manipulations. They keep crying the sky is falling, and the dot plots keep looking the same. Ridiculous expectations of rate hikes and tapering and then when the market swoons, back to QE
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RonJ
RonJ
4 years ago
“Powell will either hop into bed with Biden and Yellen or he will be replaced.”
Question is, after all he has been through, does Powell want to stay for more?
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Maximus_Minimus
Maximus_Minimus
4 years ago
Reply to  RonJ
Why? What has be been through? In their mind, everything’s working as intended, and there’s nothing they cannot fix by pushing the print or inflation button. 
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RonJ
RonJ
4 years ago
Reply to  Maximus_Minimus
Actually, they are creating the next crisis by pushing print buttons.
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FromBrussels
FromBrussels
4 years ago
The way things have evolved in recent years,  since the covid hype in particular, reversing the by now ingrained, taken for granted, insane policy would cause a unprecedented economic meltdown….
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Eddie_T
Eddie_T
4 years ago
“What’s far more likely – and scary – is that the Fed will continue to have to finance the deficit, and their balance sheet will go to many multiples of where it’s at now.”
This.
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Casual_Observer2020
Casual_Observer2020
4 years ago
Reply to  Eddie_T
Likely ? It is already happening. In order to keep up with other countries that monetize their debt without a thought of even calling it debt, this is what is happening. The Fed balance sheet is a joke because it is just a black hole with bits of money on a computer. We have entered a low interest high inflation world  for the foreseeable future.
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