With "Goldman Guys" forming the core support pillar of Donald Trump's economic and financial advisory team, it is easy to forget that Goldman is also the one bank whose alumni also dominate not only the Fed, but all other central banks, and as such its take on Fed prepared remarks is probably the most notable of all sellside analysts.
One week ago, Deutsche Bank analysts warned that the global economic boom is about to end for one reason that has nothing to do with Trump, and everything to do with China's relentless debt injections. As DB's Oliver Harvey said, "attention has focused on President Trump, but developments on the other side of the world may prove more important. At the beginning of 2016, China embarked on its latest fiscal stimulus funded from local government land sales and a booming property market. The Chinese business cycle troughed shortly thereafter and has accelerated rapidly since."
It is a long-running Fed tradition to quietly incorporate material warnings (deep within) about asset prices in the semi-annual Monetary Policy Report submitted as part of the Chair's congressional testimony, and it did not disappoint this time either, when it made the following warning: "Nonfinancial corporate business leverage has remained elevated by historical standards even though outstanding riskier corporate debt declined slightly last year. In addition, valuation pressures in some asset classes increased, particularly late last year."
And elaborated:
Western Interests Aim To Flummox Russia
Paul Craig Roberts and Michael Hudson
An article by Robert Berke in oilprice.com, which describes itself as “The No. 1 Source for Oil & Energy News,” illustrates how interest groups control outcomes by how they shape policy choices.
Live Feed
http://www.senate.gov/isvp
* * *
March rate-hike expectations have risen to their historical highs... (around 36%)
Longer-term Treasury yields took another leg higher as Yellen talked about the Fed's balance sheet.
Bank stocks are leading post-Yellen with bonds and bullion lower... The broad stock indices are unchanged...
Utes, Tech, and Energy are weighing on indices, only banks are higher...