Question of the Day

"....Where are we today? The Fed keeps buying roughly $85 billion in bonds a month, chronically delaying so much as a minor QE taper. Over five years, its bond purchases have come to more than $4 trillion. Amazingly, in a supposedly free-market nation, QE has become the largest financial-markets intervention by any government in world history."   -Andrew Huszar Sr. Fellow Rutgers Bus. School/Former Fed MBS Buyer/Former Morgan Stanley M.D.

More rational voices are emerging that Large Scale Asset Purchases are no longer effective or safe (cost/benefit wise). Forward Guidance, a wonky way of reenforcing the gravitational pull of ZIRP, will be taking over the lead policy role. It may be strong enough to tether rates but will prove anemic from a growth standpoint without Fiscal adjustments to incentivize the demand side of money. "ZIRP 4 Ever" was a snarky rallying cry in 2009 but a hash reality today. A base rate at zero was an "extraordinary" measure when first introduced. The Yellen Fed wants you to believe the policy is both "ordinary" and "effective."

Where are we today? Lost.

 

One thought on “Question of the Day

  1. Lawrence Martin

    The ‘never to end’ end point .. no one wants to be the one to call the end to the party (its so non-collegial) .. we will see what JY is made of (one way or the other)

    Reply

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