As we explained in detail 15 months ago, Keeble notes the Fed appears to have clearly signaled that the degree of accomodation is not linked to size of the Fed balance sheet, but that the flow of Fed buying is "very important." So, it's the flow, not the stock.
- Vaccine Education Summit
- Bitcoin Summit
- Ernie's Favorites
- THE R3VOLUTION CONTINUES
- "It's Not My Debt"
- Fascist Nation's Favorites
- Surviving the Greatest Depression
- The Only Solution - Direct Action Revolution
- Western Libertarian
- S.A.F.E. - Second Amendment is For Everyone
- Freedom Summit
- Declare Your Independence
- FreedomsPhoenix Speakers Bureau
- Wallet Voting
- Harhea Phoenix
- Black Market Friday
This, as others have noted, will make it many times more difficult to manipulate yields lower in the future as the "Fed is moving to a new way of looking at asset purchases."
Keeble does warn that rates could rise once again in the next several weeks if Congress reaches resolution to avoid government shutdown - which could perhaps be the post-fiscal-year-end signal for another Taper-tantrum.
All caps aside, what this means is simple: if it is indeed flow that matters (and it is), then Fed intervention can never stop, period. If the stock of a central banks' assets is irrelevant, the Fed can have $1 on the left side of the balance sheet or $1 quadrillion: it does not matter - if the market expects the Fed to stop buying assets tomorrow, then the crash is as good as here. That has precisely been the biggest flaw with the Fed-accepted stock model, per which Bernanke can buy up a few trillion in MBS and the stock market will be flat as a frozen lake. Alas, this is increasingly becoming obvious is not the case. Hence flow.
Additional Related items you might find interesting:Related items:
News Link • Trump Administration
News Link • Free Trade
News Link • Events: America
News Link • Secret Government Projects
News Link • Israel
News Link • Foreign Policy