US Federal Reserve

Authored by Nomi Prins, originally posted at TomDispatch.com,

How A Bank Conquered Washington

Authored by Mark St.Cyr,

On February 1st the Federal Reserve will conclude its scheduled two-day meeting. No one expects any change in policy to be announced, especially since the Fed has since hiked rates at the preceding meeting. And with there being no press conference scheduled, that’s been a pretty reliable indicator for all to assume it’s steady-as-she-goes.

Although I agree, what I also believe is there’s a wildcard in this one that could send everything into a tizzy. That “wildcard” is: The minutes.

In an amusing twist on the "fiat vs digital" money debate, a former Federal Reserve employee who tried to fuse the two, was sentenced to 12 months’ probation and fined $5,000 for installing unauthorized software on a Fed server to connect with a bitcoin network, the Office of the Fed's Inspector General said.

Markets will again zero in on the U.S. this week, and not just because of Donald Trump in Bloomberg's opinion. The Federal Reserve meeting and nonfarm payrolls may set a clear direction for dollar and yields for the next few months.  U.S. GDP data on Friday showed the largest negative contribution from net exports since 2010. This will give the president ammunition for his Twitter feed because it confirms his view on the evils of globalization. So prepare. Beyond Trump’s rhetoric, it’s going to be a big week for orthodox economic developments in the United States.

With former Fed chair Ben Bernanke becoming the latest academic to opine on the potential unwind of the Fed's balance sheet last week (naturally, he was against it realizing the potentially dire implications such a move could have on asset prices), here is the same topic as viewed from the perspective of an actual trader, in this case FX strategist (who writes for Bloomberg) Vincent Cignarella, and who believes that "unwinding the Fed's balance sheet could get messy."