Eventually fixed income traders will wish to be compensated for the growing risk in the real economy, pushing yields higher. Dovish forecasts from the Fed will carry less weight with this investor cohort as economic reality sets in. Fed balance sheet reduction = higher yields. Investors would be wise to remember that the Fed is … Continue reading Yields Will Move Higher
Fed Chair Powell's statement to be made Tuesday at 10:00am ET to the Committee on Banking, Housing, and Urban Affairs acknowledges that inflation may not be as "transitory" as the Fed initially thought. Powell's statement to the committee is below. Powell knew this would be the case months ago but the Fed will never admit … Continue reading Powell Acknowledges Inflation Could Persist Longer Than Anticipated
One news item that caught our eye this week was that the Office of the Comptroller of the Currency (a division of Treasury) wants banks to extend credit to those who lack credit history. Banks plan to share some consumer data with each other in order to build enough history to justify extending credit. Smells … Continue reading Treasury Wants More Consumer Spending
The Fed likely won't taper asset purchases this calendar year. It should, but it won't. **Purchase our Amazon Kindle book Stagflation Is Imminent: HERE We previously mentioned mid-term elections as one reason why the Fed won't take away the punch bowl. Second, the Labor Participation rate - a key economic indicator for the Fed - … Continue reading The Fed Will Not Taper In 2021. Inflation Is Not Transitory.
Treasury Secretary Yellen's minimum global corporate tax is not yet global law but soon will be. The U.S. and Western European Governments and Central Banks have marched in lock step since 2008's Financial Crisis. A decade-plus of record fiscal spending, accommodative monetary policy (a Keynesian's dream) has led to record, expanding fiscal deficits that will … Continue reading Yellen’s Minimum Global Corporate Tax Is A Big Deal
We recently wrote that weening the equity market and Americans off of easy money will be difficult. We expect The Federal Reserve to march in lockstep with Congress and Treasury rather than act as the independent check on Government the Fed was meant to be. Thus, we expect monetary policy to remain loose for the … Continue reading The Fed’s Evolution From Independent Agency to Treasury Subsidiary