Article Image
News Link • Federal Reserve

Fed Chair Powell's Admission: "The Fed Has A Short Volatility Position"

• zerohedge.com by Tyler Durden

And while they mostly spoke metaphorically (although back in 2012 we observed a distinct shift in the VIX futs  when the current head of the Fed's trading desk, Simon Potter, replaced Brian Sack), we now have explicit confirmation that the Fed's "short vol" position appears to be rather literal.

This is what the next Fed Chair, Jerome Powell - who is scheduled to replace Janet Yellen next month - said during the October 23-24, 2012 FOMC meeting - just one month after the Fed announced QE3, as today's just released 2012 FOMC transcripts revealed:

I have concerns about more purchases. As others have pointed out, the dealer community is now assuming close to a $4 trillion balance sheet and purchases through the first quarter of 2014. I admit that is a much stronger reaction than I anticipated, and I am uncomfortable with it for a couple of reasons.

Join us on our Social Networks:

 

Share this page with your friends on your favorite social network:


GoldMoney