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Our Fed Is Now The ‘Yield Shield’…No Consequences To Bad Monetary Policy Forever And Ever…Right?

Our Fed Is Now The 'Yield Shield'...No Consequences To Bad Monetary Policy Forever And Ever...Right?
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Today the Chairman of the Federal Reserve Bank of the United States told Congress that inflation is ‘still subdued’ and free money forever is no problem, effectively providing a backstop to Joe Biden’s business-crushing economic policies if left to stand on their own.

Inflation and employment remain well below the Federal Reserve’s goals, meaning easy monetary policy is likely to stay in place, central bank Chairman Jerome Powell said Tuesday, reported CNBC.

However, smart money is screaming from the mountain tops that this fantasy is just that…a monetary policy fantasy. There will indeed be consequences, and the piper will indeed have to be paid. When this happens? Who knows. But, it is safe to say IT WILL HAPPEN.

The bond market will at some point regain control of the bond market, interest rates will rise, and the U.S. economy will be forever damaged as a result of irresponsible spending and money printing.

As the old saying on Wall Street goes — Interest rates are low until they’re not.

But what it that is Beijing Biden’s goal all along?

Below is a great article outlining just this…reality. (h/t Zero Hedge)

forever consequence free? Can every economic and market problem be solved by ever more intervention? Anyone like myself that has questioned the efficacy of the ever more aggressive interventions we see from crisis to crisis has found these questions to be moot as time and time again central banks have shown to successfully not only erase any corrective activity in markets but also propel markets to ever new highs irrespective of any earnings growth issues, valuations or fundamentals.

Indeed central banks will likely see themselves validated as the expected growth picture that is emerging looks to be the most positive in 55 years…

Yet suddenly we are seeing wobbles in markets. Why? Because of the velocity of inflation expectations and correlated speedy rise in yields…

To read more visit Northman Trader.

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1 comment

steve hernon February 24, 2021 at 8:22 am

I can only hope Trump has learned his lesson that you can not keep running a deficit of 8 trillion dollars in 4 years and keep saying you have rescued the economy. Trump caved to Wall Street, Silicon Valley and big corporations and they spent all the money he let them make to stab him in the back and kick him out of office, legally or illegally. It doesn’t matter, does it?


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