US Federal Reserve

In his latest note, SocGen's permaskeptic Albert Edwards looks back 20 years in time to the Asian Crisis, and makes an interesting observations: nothing has really changed. In fact, as he explains, the events over the past 2 decades have been a "linear progression of the monetary madness that followed the 1997 Asian", and all thanks to central bankers who used the crisis as a springboard for ever more drastic monetary interventions, resulting in one bubble after another, culminating with the current state of the world, to wit:

Via KesslerCompanies.com,

With all the talk of central bank hawkishness in the last week, one might assume there was some inflation to point to. It is quite the opposite. It is one thing to talk about inflation being below the Fed’s target of 2%, it is an entirely different issue to see it flirting with deflation! Shorter-term trends of core-inflation are very near to 0%, levels we haven’t seen since the great recession and the advent of quantitative easing.

Having hiked in June amid gravely disappointing macro-economic data, all eyes are now on the minutes for inflation (weakness blamed on "idiosyncratic factors"), labor market (concerns about "sustained employment undershoot"), balance sheet normalization (Fed "divided" over when to start), and market valuation concerns ("equity market high on standard metrics"). Rate hike odds for Sept (22%) and Dec (56%) were rising into the release.

Additional headlines...

Authored by Ryan McMaken via The Mises Institute,

Speaking in London, Federal Reserve chair Janet Yellen Tuesday predicted that the “the system is much safer and much sounder” and explained that the Federal Reserve is prepared to deal with numerous enormous shocks to the economy.

In her conversation with Lord Nicholas Stern, Yellen also went on to list the reasons that, thanks to central bank intervention, there is unlikely to be another financial crisis “in our lifetimes.”

With less than two hours until the Fed releases the minutes to the June FOMC meeting which may shed some more light on how Fed officials view the simultaneous declines in unemployment and inflation,  there are two key things markets will focus on: