Fed policy comment

So the theme is ‘the Fed is getting behind the curve’ That is, Yellen keeps rates ‘too low’ causing the economy to overheat. Complete nonsense, of course, but it drives markets until it doesn’t. Much like QE. The 0 rate policy, including QE, remains no way supportive of growth and employment, but instead deflationary and […]

Inflation Picture has Deteriorated

He’s on the opposite spectrum from Yellen, but inflation has deteriorated to the point where risks are elevated. Once the fed has figured out it can control the FF/LIBOR with TAF type or repo and ‘market functioning’ somewhat restored, I expect that the imperative to cut rates will be greatly diminished. Fed’s Lacker: Inflation Picture […]