Tuesday, August 27, 2019

Mission Impossible For The Fed

If this, from Bank of America's foreign exchange strategist Athanasios Vamvakidis doesn't sound familiar, well, then, you haven't been reading our blog:
"The risks that monetary policy is trying to address are primarily the result of policy failures in other areas, which more central bank easing is unlikely to offset, in our view."

"Moreover, we have expressed concerns that central bank easing may actually allow such policy mistakes to continue or even worsen."

"Most central banks have very limited policy room to begin with and may be wasting valuable ammunition."

"...monetary policy easing in this environment supports asset prices more than the real economy. This increases risks for asset prices bubbles, with the eventual adjustment leading to a worse economy..."
Here's from our 7/31 post, which reflects the second paragraph above:
"So, alas, the Fed ends up being complicit, or guilty of aiding and abetting, if you will, as a buoyant stock market keeps the powers that be emboldened to continue their ill-conceived quest to utterly disrupt the established global commercial complex."
Here's from our 7/19 post, which speaks to the third paragraph above:
"...gets directly in the way of the Fed’s attempts at restocking its ammunition with which to battle the next recession:"
And, à la the last paragraph above, here's from our 8/20 post:
"In fact I'll go so far as to say that if we don't get rid of all of the tariffs (of the past year+) sooner than later, rate cuts, QE and payroll tax cuts --by doing little more than inflating one hellacious stock market bubble -- will ultimately set us up for something that'll feel too much like 2008."
In fact, we pound the topic in that 7/19 post subtitled: The Fed Is Compensating For A Policy-Induced Shock

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