The Inevitable New The Inevitable Trump Mocking Thread

Just a little bit on incentive is all it takes.

B22108011.236650602;sz=1x1;dc_lat=;dc_rdid=;tag_for_child_directed_treatment=;tfua=;ord=486198367696978000
imprimage.poll




https://www.wsj.com/articles/fed-chairman-powell-sees-flexibility-on-rates-this-year-11546616769


Fed Chairman Powell Sees Flexibility on Rates This Year
Stocks rally after chairman says central bank isn’t on a fixed path to push benchmark rate higher



ATLANTA—Stocks rallied Friday after Federal Reserve Chairman Jerome Powell said mild inflation gives the central bank greater flexibility to set policy in the year ahead and that the Fed wasn’t on a fixed path to push its benchmark interest rate higher.

“With the muted inflation readings that we’ve seen coming in, we will be patient as we watch to see how the economy evolves,” he said at a conference in Atlanta.


Fed officials last month penciled in two rate increases this year, but Mr. Powell said that path could change if recent market volatility causes the economy to slow more than officials anticipate.

“We will be prepared to adjust policy quickly and flexibly and use all of our tools to support the economy should that be appropriate,” he said, speaking on a panel with former Fed leaders.

Mr. Powell said markets have tumbled in recent weeks and aren’t expecting any Fed rate increases this year because investors are placing greater weight on risks to the outlook that haven’t yet shown up substantially in U.S. economic data.

Those risks, he said, include slower global growth, weakness in China, trade tensions and “general policy uncertainty coming out of Washington.” U.S. data so far remains “on track” to sustain recent economic momentum, he said.

Bond yields tumbled two weeks ago after investors believed Mr. Powell wasn’t sufficiently sensitive to recent market developments. On Friday, Mr. Powell didn’t say whether or when the Fed planned to raise interest rates again.

Mr. Powell also curtly addressed speculation that President Trump’s unhappiness over monetary policy might lead to his removal as Fed chairman. Mr. Trump last month raised the topic of dismissing Mr. Powell with advisers, though White House advisers later said he wasn’t planning to do so.

Mr. Powell said Friday he wouldn’t resign his post if Mr. Trump asked him to do so, which is important because it isn’t clear whether the law would allow Mr. Trump to fire the Fed chairman. He declined to say whether he planned to meet with Mr. Trump. White House advisers have said they would like to arrange a meeting between the two men.

Mr. Powell said the public shouldn’t worry about whether the central bank would yield to political pressure. “The Fed has a very strong culture around nonpolitical activity,” he said. Making decisions based on data—and not politics—is “very much in the DNA of anyone who’s spent any time at the Fed.”

Separately, Mr. Powell pushed back against some investors’ recent fixation on the Fed’s plans to continue shrinking its $4.1 trillion portfolio of bonds and other assets, which swelled during successive stimulus campaigns after the 2008 financial crisis.


The Fed in October 2017 initiated a process to gradually shrink those holdings by allowing as much as $50 billion in bonds every month to mature without replacing them. That plan ran smoothly for a year, but last fall, as stock markets began to tumble and government bond yields declined, some investors said the run-off was having a more pronounced
 
Labor market is too tight. Won't be able to do much on the rate front.

Also, China ain't buying like they used to. We're headed into a place where you need someone who can walk a balancing act - due to juicing the economy too soon, profits are going to fall, but employment is going to stay pretty strong. Wage pressure will be a bit inflationary. As will debt. Who will buy the bonds - and at what price?

That will be the question...
 
Friesland said:
Wait, wut? Why didn't you say so in the intro class?

Meanwhile, very good job numbers (with some retroactive revising up even) and a bit of wage pressure... So I think the old QE11 might not sail...
Click to expand...
Your house is the banks asset. QE has been sailing for several decades
 
You must log in or register to reply here.
Back
Top