All hell is breaking loose in the Sunday evening session where S&P equity futures and Asian markets tumbled, while havens such as sovereign bonds and gold soared amid fears of an inflation shock in the world economy as oil soared on the prospect of a ban on Russian crude supplies.…
What happens when Blinken provides "forward guidance."
Zero HedgeAll Hell Breaks Loose: Futures, Stocks Plunge As Oil Soars To $139, Gold Hits $2,000
Tyler Durden
Came across this from Powell.
ReplyDeletehttps://twitter.com/GreekFire23/status/1500146259922989060?cxt=HHwWiMC53ejEy9EpAAAA
Would love to hear Matt and Mike game this one out if Powell tried to emulate Vockler (rapid interest increase) to 'tame inflation'.
How the Fed is supposed to solve a real resources and supply chain crisis by messing with interest rate is anyone's guess but I digress.
Tame those animal spirits!
ReplyDeleteWell short term, it would be bearish as the depository’s losses on available for sale regulatory assets would increase rapidly… but then fiscal support via interest income to USD savers would increase over time and foment a recovery…
ReplyDeleteIncreasing sawtooth wave pattern…
Other th8ng is under volcker Fed didn’t pay IOR or RRP interest…
ReplyDeleteSo if Fed was to raise the policy rate very rapidly they would quickly become insolvent as their short term interest liabilities would soon exceed their portfolio income …
Not that they won’t do this I think the whole institution is staffed by incompetent people so it could happen but ithey would probably have to quickly reverse the rate policy and instead accelerate system reserve reduction…