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 The Fed Just Made Its Most Hawkish Turn in 30+ Years (Did Anyone Notice?)

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RR Phantom

RR Phantom

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The Fed Just Made Its Most Hawkish Turn in 30+ Years (Did Anyone Notice?) Vide
PostSubject: The Fed Just Made Its Most Hawkish Turn in 30+ Years (Did Anyone Notice?)   The Fed Just Made Its Most Hawkish Turn in 30+ Years (Did Anyone Notice?) Icon_minitimeTue Jun 26, 2018 6:15 pm

I realize it’s getting late to discuss the June 12–13 FOMC meeting, but I think the Fed’s biggest news from that meeting may have slipped under the radar.

The Fed Just Made Its Most Hawkish Turn in 30+ Years (Did Anyone Notice?) Bubble-popping-picture_thumb

To confirm the relevance of what I thought I heard during the post-meeting press conference, I spent some time last week reviewing old speeches, transcripts and other materials produced by Fed officials. I’m now convinced that Chairman Jerome Powelldelivered an important message that went largely unreported, and I expect him to keep at it until people take notice.

Powell’s message is that he intends to pop bubbles—both asset-price and credit bubbles. He didn’t communicate a precise threshold for bubble popping, but I believe he meant not just big bubbles but potentially little bubbles and possibly even pre-bubbles if that becomes necessary to contain the risks of financial instability. If we take him at his word, we should expect him to respond much more aggressively than his predecessors did to financial excesses, and those aggressive responses will occur even without an inflation threat. In other words, policy adjustments designed to maintain financial stability could disconnect from the FOMC’s inflation target.

https://www.zerohedge.com/news/2018-06-25/fed-just-made-its-most-hawkish-turn-30-years-did-anyone-notice
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The Fed Just Made Its Most Hawkish Turn in 30+ Years (Did Anyone Notice?)

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