Unofficial Dual Role
Continuing her unofficial dual role as a Fed president as well as Biden’s Treasury Secretary, Janet Yellen commented in an Atlantic interview Rate May Have to Rise Somewhat to prevent overheating.
“It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat, even though the additional spending is relatively small relative to the size of the economy,” Ms. Yellen said when asked if the economy could handle the kind of robust spending that the Biden administration is proposing.
“I think that our economy will grow faster because of them,” Ms. Yellen said of the proposed investments, such as research and development spending.
The Dow declined over 300 points Tuesday morning, as Treasury Secretary Janet Yellen warned of higher interest rates. #stockmarket #dow #dowjones https://t.co/WI6kBmF9n8
— Investors.com (@IBDinvestors) May 4, 2021
Tools? Who Has the Tools?
Biden wants to increase spending by $4 trillion with Progressives wanting even more.
Yesterday, I commented Yellen Discusses Inflation Tools As If She Was Still the Fed Chair
In a fluff interview on Meet the Press (see above link) in Chuck Todd asked Yellen about inflation.
She said the Fed has tools but twice went on to say “we” as if she was still on the Fed.
“We will monitor that [inflation] very carefully. I don’t believe inflation will be an issue but if it becomes an issue we have tools to address it,” said Yellen.
In response, I asked “Who is we? What tools does the Treasury Secretary have or is Yellen still on the Fed?”
Meaning of Somewhat
Today, Yellen continued her dual role as a Fed President and Treasury Secretary.
Now everyone gets to debate the meaning of “somewhat”.
Addendum: No Rookie Error
It’s Yellen’s Dual Role
Second time in three days speaking as a Fed president as well as Treasury Secretary.https://t.co/Ehi2d0TAwg https://t.co/35QY4iZSpN
— Mike “Mish” Shedlock (@MishGEA) May 4, 2021
What About the California Board of Education?
Does Yellen Belong on the California Board of Education Too?https://t.co/Ehi2d0TAwg https://t.co/g3S5C6Uh3T
— Mike “Mish” Shedlock (@MishGEA) May 4, 2021
A Word About Messy Tapering
And the fact that Yellen felt the need to clarify her vague and factually correct statements hours after making them shows how messy this presumed tapering process will be. https://t.co/HzHftc98Sb
— Lisa Abramowicz (@lisaabramowicz1) May 4, 2021
Mish
Clearly, Ms. Yellen hasn’t been to the grocery store lately or needed to purchase any lumber for a project. It’s ridiculous for the FED to deny the drastic increase of goods over the last 6 – 12 months. It’s disgusting how incompetent these people in government are.
“Rates need to rise a bit.”???
Would the results be so bad if the Fed announced it will raise rates 0.1% each quarter until they reach 1%? 0% nominal and negative real rates send such a bad message.
If rates move up at all, the stock market party would be over and the temper tantrum would begin…
Yellen has spoken her concern about inflation her comments came out when Gold was trading close to 1800 and that is the line that they want to defend. Conveniently enough the suasion worked for a 25$ drop in the price of gold. But now she has exposed the jugular and inflation fears are for real and there s very little the Fed and Yellen can do about. How much gold can the bullion banks sell short on their fractional reserve system? Every day we see strong demand for physical Gold and Silver. Do not underestimate the markets Yellen!
I don’t think there was much spot bullion sold, the futures basis is still very flat, if not a slight backwardation. This indicates all the action was in futures.
I can’t believe she slipped up. She must have known it contradicts the Fed’s stated stance on inflation to keep rates low so as to overshoot. She must have known the impact it would have on markets. So what’s behind the comments, is it a warning shot to keep markets on their toes? It’s a bit strange.
Maybe it was a slip up after all.
Probably carefully scripted from the get-go.
Yellen can say what she wants but rates will have to stay low for a long time. The problem with low rates is they beget low rates.
The lemmings are lined up for the start. No one really knows what to do because the world hasn’t been in a derivative-implosion situation with negative real rates. Stay tuned.
Issues in the Repo market today? Markets have a wobbly feel to me these days..
“Unofficial Dual Role”
Back when Yellen was running the FED, she said that savers wear many hats. Now she has two of her own.
When I heard Yellen yelling this morning, head for the hills, the sky is falling. I sold stocks and ran to the hills. Only to find they were very crowded and everyone was pukin.
If rates were to rise to healthy, yet still historically low levels, our beyond proportion debt bloated financial system would ‘enjoy’ the biggest meltdown ever….No worries though, CBs worldwide will keep rates at 0, even with 50% official inflation… Like Mish asks occasionally : got gold ? Don t know when but at one one point he’ll most likely nail it ….
Gold is like a higher quality cash. But the Norwegian Krone is also higher quality cash than the US dollar, and the dollar has beaten it handily for the last 20 years. Fwiw the Krone has turned up like gold.
…the USD lost 20% vs NOK in just one year….
Yes the Trump and Biden administrations are worried about Norwegian salmon undercutting American salmon so they engineered the Dollar drop.
Tu rigoles ou quoi ?
Bien sûr.
Wait until they make a big announcement that the US will go carbon free, the Norwegian krone, propped up by oil and gas, will drop like a stone.
Now that the US-made rocket has finally docked with ISS, the next national goal will be to provide every American with a wholly American made face mask.
These goals have to be splashy and expensive.
Wait until they make a big announcement that the US will go carbon free, the Norwegian krone, propped up by oil and gas, will drop like a stone.
These national goals have to be splashy and expensive.
Any American salmon can beat the shit of any five Norwegian ones.
Maintenant tu es vraiment plein de merde. lol.
Just indulging in a little patriotism.
I said it turned up. I was looking at the chart when I wrote that. What I said is still very true. In 2008 the Krone was at .20 USD. Now it’s around .12.
The dollar is not falling through the floor by any means. The DXY is at 91 and change.
In 2009 the dollar was at 72 and the goldbugs were saying it was done. They were wrong then and they’re still wrong. But at least they’re consistent. LOL.
I’m long gold again at the moment, btw. 🙂
Double posting because again, and no edit or delete, sigh.
Who cares.
No sense in borrowing money at any price since the half the ROI on real estate and stocks is now going to be claimed by the government for taxes.
This shit matters to markets. The smart people will be raising cash. Many already are, like Gates, Buffet, and Burry. If I had any sense, it’s what I would do…I’ve called a meeting of my family stakeholders to talk about it.
Yellen and Powell are joined a the hip.” We” is both of them, and all the usual suspects.
Why cash? A ‘dry powder’ argument? I’m just curious – because I could see cash being a bit of a double-edged sword at this time.
Dry powder is correct, although the other edge of cash (inflation) is a bit rusty. I’m not the least bit worried about my cash losing much value in the short run.
The dollar bottomed on January 6th, and it’s been in an uptrend since then. If I had to guess, I’d say it has a bit more upside, perhaps more than most people think, given the current shucking and jiving being done by Old Joe.
The Senate will block it but the margin is razer-thin and too close for comfort. How far is the Left willing to go to further it’s agenda? I don’t trust anybody there anymore. Their mantra is that rules are for chumps.
Dry powder has been thrashed and thrashed again. These criminal masterminds have been waging war on cash and fixed investments like bandits.
If we still had medieval kings, and these cretins screwed up as badly as they did, the king would have them publicly executed, and put their heads on spikes at the gates.
…US$ in an uptrend since January ? Don t think so, not vs the Euro and other ‘developed ‘ nations’ currencies anyway…
I am looking at the DXY Index. It bottomed on Jan 6, 2021 at 89.44 and as of today is still in an uptrend. Draw the trend line and look for yourself.
Oh the horror of actually paying more taxes on an industry backstopped by the government.
You just haven’t paid enough tax yet. I hope you get to a point where you start to feel the bite….and frankly, I’m pretty sure you will, in time.
As I believe I’ve told you before,@Casual_Observer , nothing is legally stopping you from writing some extra checks to the U.S. Treasury if you wish to do so.