Is the Fed even tapering?

[Madison320]

Has anyone else noticed that the Fed's tapering that was supposed to start in November, hasn't seemed to start yet? They should be down to around 60 billion a month for january but they're still over 100 billion.

My guess is they're already having trouble with rates spiking and are trying to delay the taper for as long as possible, hoping for a miracle.

https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm

 

[acptulsa]

Has anyone else noticed that the Fed's tapering that was supposed to start in November, hasn't seemed to start yet? They should be down to around 60 billion a month for january but they're still over 100 billion.

My guess is they're already having trouble with rates spiking and are trying to delay the taper for as long as possible, hoping for a miracle.

https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm

Either that or they want to destroy the FRN and replace it with something global, with no cash version.

And that does allow them to give that much more to their buddies at Pfizer to buy gold with. It's also driving down wages (while allowing them to give "raises") and destroying the middle class and Boomers' savings. Neither of which they have shied away from the last fifty years. Not to mention building up the surveillance state.

Sometimes the simple explanation is the correct one.

 

[Madison320]

Either that or they want to destroy the FRN and replace it with something global, with no cash version.

And that does allow them to give that much more to their buddies at Pfizer to buy gold with. It's also driving down wages (while allowing them to give "raises") and destroying the middle class and Boomers' savings. Neither of which they have shied away from the last fifty years. Not to mention building up the surveillance state.

Sometimes the simple explanation is the correct one.

I doubt they're doing it on purpose. If the dollar crashes it's more likely they're out of a cushy job.

I think they're just kicking the can down the road as always, only in this case the end of the road is in March. My guess is they're hoping if that maybe inflation readings will start cooling off, maybe the markets will go into a slight correction, anything so they can call off the taper and keep rates at 0%.

It's going to get real interesting by March or so. I'm guessing they might cancel the taper and call it a "mid course correction" like they did during the repo crisis in fall of 2019(?).

 

[acptulsa]

I doubt they're doing it on purpose. If the dollar crashes it's more likely they're out of a cushy job.

They started this just as confident as the next psychopath that they could land on top of that heap. And knowing full well that they can get enough kickbacks to pay their rent in Oman for the next six thousand years, just in case.

I guess you haven't noticed that the previous CEO of CSX sold off so many assets just for a few fat quarterly bonuses that they could no longer do the job, and competitor Norfolk Southern was able to do this...

The future means nothing to sociopaths. The Biden Administration are the ultimate corporate raiders, and it's the U.S. of A. they're destroying for fun and profit.

 

[oyarde]

None of it matters . The Fed will raise the interest rate a 1/4 point a quarter this yr and next and it wont do anything. Youve got double digit inflation locked in this yr best I can tell by raw matl costs , production and energy costs etc

 

[acptulsa]

None of it matters . The Fed will raise the interest rate a 1/4 point a quarter this yr and next and it wont do anything. Youve got double digit inflation locked in this yr best I can tell by raw matl costs , production and energy costs etc

Exactly. They printed like fools in the seventies, raised the prime interest rate to, what was it? 29%? And invented stagflation.

And, of course, blamed it on OPEC. Bah.

 

[Krugminator2]

Perfect cocktail for a market rally going into tomorrow. Nasdaq down 2.9% right now and a Fed day.

Fed days tend to be bullish no matter what they say. And if they are super hawkish, odds favor short term selloff then rally. Either way. odds favor stocks rallying on the Fed announce.

 

[Madison320]

None of it matters . The Fed will raise the interest rate a 1/4 point a quarter this yr and next and it wont do anything. Youve got double digit inflation locked in this yr best I can tell by raw matl costs , production and energy costs etc

I'm reading these articles yesterday basically saying "See, we don't need the Fed as a backstop! The market rallied back on it's own!"

Ha! Ha! Yeah, wait until the Fed actually CHANGES monetary policy from the loosest in history to something slightly less than the loosest in history. The whole idea that QT and rate hikes are priced in is gigantic joke. They were saying that last time in 2019 when rates were at 2% and the balance sheet at 3.9 trillion and then the "priced in" market collapsed and the Fed had to quickly lower rate and resume QE.

 

[Madison320]

Perfect cocktail for a market rally going into tomorrow. Nasdaq down 2.9% right now and a Fed day.

Fed days tend to be bullish no matter what they say. And if they are super hawkish, odds favor short term selloff then rally. Either way. odds favor stocks rallying on the Fed announce.

Krug! I thought you were gone!

It's getting interesting now. The box the fed is in is becoming more obvious everyday. Loosen and we get high to hyper inflation. Tighten and we get a historic collapse.

 

[Cowlesy]

I just put my flip a coin as to what the market is going to do one day to the next. Seems to work okay lol

 

[acptulsa]

[MENTION=37914]Madison320[/MENTION], Biden answered your question. Check out the flap over him calling a Fox reporter a son of a bitch. You were thinking he did that because he's senile. He did that to cover up what he said because he's senile.

He was asked if inflation would be a liability during the midterms. He replied, no it's an asset.

Remember what Vladimir Lenin said about inflation?

 

[Krugminator2]

Krug! I thought you were gone!

It's getting interesting now. The box the fed is in is becoming more obvious everyday. Loosen and we get high to hyper inflation. Tighten and we get a historic collapse.

I strongly doubt the situation is that dire.

I get a lot wrong but I posted for like six years here why pre-Covid wasn't inflationary. And then I posted why the big increase in M2 was highly inflationary. I wasn't completely sure but I thought it would be an interesting test case. Milton was right about QE and looks like he gets closest to the pin on M2 being the cause of the inflation. Unfortunately things like greedy businessmen and supply chain disruptions neither of which is capable of creating inflation across the board are getting the blame.

Steve Hanke should be the North Star for anyone interested in monetary policy. This WSJ article from a year ago was the way I thought the world worked and it seems to be correct.

 

[acptulsa]

Unfortunately things like greedy businessmen and supply chain disruptions neither of which is capable of creating inflation across the board are getting the blame.

That's the most clownish aspect of it all. During the post-Bretton Woods II printing spree, OPEC was the handy scapegoat. Now the scapegoats are either meaningless, like you say, or things they slapped us with to slow velocity--in other words, anti-inflationary.

As long as idiots are the majority, they'll say any damned thing.

 

[Madison320]

I strongly doubt the situation is that dire.

I get a lot wrong but I posted for like six years here why pre-Covid wasn't inflationary. And then I posted why the big increase in M2 was highly inflationary. I wasn't completely sure but I thought it would be an interesting test case. Milton was right about QE and looks like he gets closest to the pin on M2 being the cause of the inflation. Unfortunately things like greedy businessmen and supply chain disruptions neither of which is capable of creating inflation across the board are getting the blame.

Steve Hanke should be the North Star for anyone interested in monetary policy. This WSJ article from a year ago was the way I thought the world worked and it seems to be correct.

Of course M2 is the most strongly correlated with price inflation, it practically IS price inflation. But M2 is not good at predicting future price inflation in the long run.

In the long run it's the fed balance sheet that drives M1,M2, etc.

Fed balance sheet => M1,M2,M3 => price levels

Maybe we actually agree it's just that you're a short term investor and I'm extremely long term.

 

[Madison320]

This reminds me of 2019 when the Fed did its first rate hike to .25% and some people here were saying "See? Everything is fine!"

And I kept saying "yeah, get back to me when they get to a rate that's not basically zero, like 2%". And of course when we hit 2% everything started crashing. The only difference now is that we're in much worse shape with much more debt, so they'll be lucky to get to 1% this time.

And as I said in the OP they're supposed to be 3 months into the taper and they haven't even started!

 

[Pauls' Revere]

"soon"

DOW futures now -502.

 

[Krugminator2]

"soon"

DOW futures now -502.

The Nasdaq is down 20% from its high.... The soon already happened.... Unless you were saying buying futures at 1 am when stocks were down 2% was a good idea.

 

[Pauls' Revere]

The Nasdaq is down 20% from its high.... The soon already happened.... Unless you were saying buying futures at 1 am when stocks were down 2% was a good idea.

Thanks for adding reputation to this user. May you be lucky enough to receive the same Reputation back in turn.

 

[oyarde]

One thing to keep in mind is when the fed starts the 1/4 point increases even if they stop the purchases they wont try and reduce the balance sheet so that will be different . I think they will not because of what happened last time they tried both .

 

[oyarde]

So , is the fed tapering ? tapering purchases maybe , raising interest probably . None of which matters from where I see it . The country is in a considerably weaker position as far as money , debt , interest , inflation etc than it was 13 years ago before the debt tripled.