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While I don’t agree with some of the article ,the part I do agree with is the bond markets are way to big for the fed to fight the worlds investors when they see things differently than the fed does
While I don’t agree with some of the article ,the part I do agree with is the bond markets are way to big for the fed to fight the worlds investors when they see things differently than the fed does
question-what does the Fed do with the 120 billions worth of papers it bought every month?
Does it ever have to dispose them?
That depends on the asset. Mortgage backed paper must have some termination date. As do Treasuries, but those can be rolled over ad infinitum if desired.
And that simple fact IMO is the ultimate key to ANY desired Federal spending. Of course it can be inflationary if continually rolled over and never paid back with Federal tax money.
While I don’t agree with some of the article ,the part I do agree with is the bond markets are way to big for the fed to fight the worlds investors when they see things differently than the fed does
so far it is working -buying 120 B of IOUs to keep the rate low.
The rates change by the minute daily by investors. If anything the fed wants higher rates on bonds to cool inflation which is why they will taper …the bond markets are bidding rates lower
Maybe the rise of inflation isn’t going to be “transitory" after all
Political wordsmiths at work
1: Transitory to get them familiar
2: Temporary - this is what they are saying now to keep them believing.
3: New normal - they drop their mic and laugh.
Maybe the rise of inflation isn’t going to be “transitory" after all
Political wordsmiths at work
1: Transitory to get them familiar
2: Temporary - this is what they are saying now to keep them believing.
3: New normal - they drop their mic and laugh.
Of course ongoing low grade inflation remains inevitable. But IMO much of the current spike in inflation will be transitory as it has been related to our emergence from the Pandemic. With all the stimulus, unplanned savings, and now serious supply and demand imbalances all over the place as people go back to doing and buying all their usual things, at least temporary economic disruptions were bound to occur and many prices have had nowhere to go but up. But in the next year or so much of those imbalances will be ironed out, assuming we continue on our current favorable Pandemic course.
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