Poll: Fed action

Investment Analysis Clubs Macro Economic Trends and Risks
1

From Wendy:

If the Fed actually does shrink its book by $3 trillion over 2 years the market will respond. That is a Macro risk that we all need to be aware of. They don’t necessarily have to raise interest rates (e.g. the fed funds rate) to do this, just quietly omit buying new bonds as old ones run off

Now what will the Fed ACTUALLY do and why, over the next 24 months?

To expand on choice (3): The Fed will not tighten/taper as Powell has no wish or guts to be he party pooper/ upset TPTB. Government has already large debt and even larger (over)spending plans which are helped by a little financial repression, and a motivated bond buyer - savers and retirees be damned. Nobel prize winner supports this thinking, so why worry - better than being attacked for „strangling the economy during a pandemic“?

So much to this cynical option. Your view?

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  • Fed will get serious and taper/ tighten to combat inflation
  • Fed will not tighten meaningfully, convinced inflation is temporary
  • Fed will not tighten meaningfully due to lack of balls
  • Other
  • My pants feel rather tight

0 voters

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Testicular polling is for those with both hands in their pockets and smiles on their faces.

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From Wendy:

If the Fed actually does shrink its book by $3 trillion over 2 years the market will respond.


yeah I noticed that quote as well. I do not think it is the plan.

I think buying low rate bonds when things are bad and holding them by the FED until maturity will prop up the financial system. Those bonds are not worth much.

This current move is just to extinguish some of the inflation by reducing how much debt is being bought by the FED.
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4

The feds will tighten meaningfully shortly after the election.

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5

The Fed will continue screwing up the economy.

The Captain

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6

They won’t do much to upset the apple cart for about 10 months. Then, maybe.

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Testicular polling is for those with both hands in their pockets and smiles on their faces.

Tightening too much hurts!

The Captain

1 Like