Statement Tracker
The above from the Wall Street Journal Statement Tracker.
Two Changes
- Spending is now moderate, not strong
- Inflation is “returning to” rather then “nearing” the objective.
Mike “Mish” Shedlock
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Fed Holds Rates Steady, Says Almost Nothing
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There was another policy “clarification” Powell made in the Q&A. Paraphrasing, he said: Some people think the Fed is okay with sustained inflation below 2%. We are not. We intend to reach our target of 2%.
Fans of wealth inequality have no better friend.
Is it just me, or when asked about having sympathy for savers who are dependent on fixed incomes being hurt by ultra low interest rates did he say: “Many of those individuals own homes and home prices have increased substantially.”
In other words, he admitted to inflating asset prices and suggested those in a bind mortgage their homes to survive. Talk about being a banker’s banker!
In other words, “There is no need to save if you own a home, because home prices always go up.”
And I guess it would follow that if you are not a homeowner, you can go ahead and vote for Bernie Sanders.
These people are completely insane.
“And I guess it would follow that if you are not a homeowner, you can go ahead and vote for Bernie Sanders.”
Actually, Powell had an answer for that, too. He stated low income folks want interest rates to stay low so they can keep borrowing more to live beyond their means and still make the payments.
It’s interesting that maintaining or even increasing purchasing power obtained for one’s labor never enters the discussion. Also, I imagine one of the entities borrowing more to live beyond its means would be the US Federal Government!
I found his Q&A rather astonishing in its read-between-the-lines honesty.
“It’s interesting that maintaining or even increasing purchasing power obtained for one’s labor never enters the discussion.“
The central goal of financialized progressivism, is that all wealth and purchasing power should be distributed according to how close one is to the central bank. Not according to ones labor, talents, effort, usefulness, productivity nor anything quaint of that sort. Just closeness to the central bank, hence connectedness to the ruling regime. That is, after all, the only known way to ensure the wealthy and powerful, are almost exclusively comprised of a mix of mere middlebrows and rank idiots. Which is a prerequisite for them to be reliably dumb enough to fall for anything quite as plain stupid, and obviously so, as financialization and progressivism in the first place.
Can’t wait to see what happens to their so-called “stock market” when they EVENTUALLY announce they are ending the daily Re-Po operations.
That will never happen, but it will expand to every other sector that shows trouble. Its essential that there is nothing scary or consequence.
Never will they cant stop.
Well, actually another change, too. Can kicked repo facility. Again. And like day follows night there will be further can kicks.
December statement:
The Committee also directs the Desk to continue conducting term and overnight repurchase agreement operations at least through January 2020 to ensure that the supply of reserves remains ample even during periods of sharp increases in non-reserve liabilities, and to mitigate the risk of money market pressures that could adversely affect policy implementation.
Today:
The Committee also directs the Desk to continue conducting term and overnight repurchase agreement operations at least through April 2020 to ensure that the supply of reserves remains ample even during periods of sharp increases in non-reserve liabilities, and to mitigate the risk of money market pressures that could adversely affect policy implementation.
You gotta do what you gotta do to keep a failing monetary system from completely collapsing.
Central Banks are juggling an ever increasing number of chainsaws.
At SOME point they will run out of “luck”.
I am with you Bam_Man. The Fed is managing chaos-prevention and all other kinds of things that could result in anarchy. This is why they: 1) Buy stocks 2) lower rates when it may not even be necessary 3) Buy MBSes 4) perform QE[1..n] where n can be whatever it needs to be 5) Perform repo operations
Things that will be added to list in the 2020s:
Pension support
Other asset support
Direct Bond market intervention (they did this during previous crises from computers in the Caribbean using funny money on Treasury Bond sales to stimulate demand for US government bonds)
Any asset that needs reflation or will save the system
This is the gift to Trump – we will keep your stock market up but sorry on the interest rates.