Yes, they are definitely in kick-the-can-down-the-road mode right now.Debt creation is now a political weapon, like the SPR and everything else.
The fed says they are "data driven", but that's only because at any given moment they are one hedonic adjustment away from getting whatever numbers they want.
From that perspective a Trump victory in November could trigger a rate hike at the December meeting, or Jan if the election is tied up in the courts for a while.
That would also have the impact of making the debt numbers balloon on Trump just as his administration starts since all the short term debt Yellen has been buying would need to roll over at higher rates.
If the big guys wins, expect rates to stay lower longer and to write some articles about how official inflation numbers don't correlate with price and money supply increases.
Also, plenty of black swans are circling and any of them landing could have dire effects on rates. The market seems to be trading these risks as if they all have very short tails. A risk event with a longer tail immanentizing would surprise.
I think we may already be on to "when will interest rates rise from here?"
The Fed is going to be stuck on auto-pilot until after the election. We would need to see a serious increase in inflation for them to act.
Yes, they are definitely in kick-the-can-down-the-road mode right now.Debt creation is now a political weapon, like the SPR and everything else.
The fed says they are "data driven", but that's only because at any given moment they are one hedonic adjustment away from getting whatever numbers they want.
From that perspective a Trump victory in November could trigger a rate hike at the December meeting, or Jan if the election is tied up in the courts for a while.
That would also have the impact of making the debt numbers balloon on Trump just as his administration starts since all the short term debt Yellen has been buying would need to roll over at higher rates.
If the big guys wins, expect rates to stay lower longer and to write some articles about how official inflation numbers don't correlate with price and money supply increases.
Also, plenty of black swans are circling and any of them landing could have dire effects on rates. The market seems to be trading these risks as if they all have very short tails. A risk event with a longer tail immanentizing would surprise.
Can we expect an M2 update soon?
Yes I reviewed the numbers this evening and plan to have something posted this week.