The Federal Reserve James Bullard was on CNBC's Squawk Box yesterday to explain the Fed's policy in light of the confusion and uncertainty created after the release of the Fed's minutes.
The interview can be found here after the jump.
Now lets get something straight, there is absolutely no way the Fed is ever ending QE. Bernanke has hinted at in past interviews, speeches, etc. that a part of the QE programs were specifically targeting higher equity prices- in some backward understanding that this may help lead to a wealth effect. The very fact the equity markets (and risk assets for that matter) sold off after Wednesday's release of the Fed minutes must have sent concern up the spine of certain Fed officials, and is probably one reason we are even seeing Bullard being interviewed on CNBC. With the chances of a recession increasing- as I have shown-, more Central Banks getting into the 'lets target our exchange rate" game, and with more than $3 trillion in treasury debt coming due this year..... there is absolutely no way the Fed is ending or pulling back on QE. Just not going to happen. If anything, I would not be surprised if they do not increase purchasing levels.
Now lets get something straight, there is absolutely no way the Fed is ever ending QE. Bernanke has hinted at in past interviews, speeches, etc. that a part of the QE programs were specifically targeting higher equity prices- in some backward understanding that this may help lead to a wealth effect. The very fact the equity markets (and risk assets for that matter) sold off after Wednesday's release of the Fed minutes must have sent concern up the spine of certain Fed officials, and is probably one reason we are even seeing Bullard being interviewed on CNBC. With the chances of a recession increasing- as I have shown-, more Central Banks getting into the 'lets target our exchange rate" game, and with more than $3 trillion in treasury debt coming due this year..... there is absolutely no way the Fed is ending or pulling back on QE. Just not going to happen. If anything, I would not be surprised if they do not increase purchasing levels.
No comments:
Post a Comment