Via Charles Hugh-Smith of OfTwoMinds blog,
Geithner's conclusion: current policy extremes, politics and astounding debt levels limit policymakers' emergency options in the next crisis.
Many of us disagree with the bloviated, self-congratulatory notion that the Federal Reserve and the U.S. Treasury saved the U.S. economy, capitalism and everything else in 2008-09 up to and including the Central Bank of Mars and the bat guano futures market.
The US economy continues to implode as inflation ignites.
GDP Now has collapsed from 3.4% in early February to 1.3% today. It will be revised even lower based on the awful deficit numbers (the US trade deficit hit a five year high in January).
Meanwhile, inflation is soaring.
The Fed tracks FOUR inflation metrics. They are Core CPI, Core PCE, Trimmed Mean CPI and Cleveland Median CPI.
Roughly all four are now at or above the Fed’s so-called “target” of 2%.
· Core CPI is growing at an annualized rate of 2.1%.
Following the massive ADP employment beat (but productivity disappointment), March rate hike odds finally upticked to certainty. Fed Funds futures now imply a 100% chance that The Fed hikes next week.
Up from low 20s to 100% in a month...
What did The Fed see that suddenly spooked them all?
Which reminds us of the WTF-est chart we know of right now - as The Fed's forecast for
GDP collapses, so the odds of a rate hike soar (FF Futs tumble)...
Via Kevin Muir of The Macro Tourist blog,
Although the market is convinced the Federal Reserve will get aggressive with their rate hikes, I am not sure market participants have thought this through. Let’s not forget the Federal Reserve is sitting on the largest balance sheet in history.
This portfolio is the result of years of Quantitative Easing. It was made riskier with the Fed’s “Operation Twist” that extended the duration of their balance sheet by buying long dated securities while selling shorter ones.
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Endless Fed Deceit
Posted with permission and written by Craig Hemke (CLICK HERE FOR ORIGINAL)