hisah wrote:lochaz-index wrote:Nice recap. Always good to see the confusion back then. Did they learn about the perils of being behind the curve?
I don't think so. They should have started hiking towards the end of 2014. These hasty hikes they're now implementing so as not to lose control, are going to mess up everything again! But before brexit happens they'll have to hike! Can they push negative interests? I doubt unless the market nosedives.
What happens when central banks delink from buying govt bonds? Sovereign debt crisis... This will eventually happen so that the CBs can survive when govts start collapsing! http://www.acting-man.com/?p=45176
This article elucidates on my suspicions all along. The Fed may not be as data dependent as they always claim to be.It may be the case that they claim to be data dependent while in the real sense they are tracking the real interest rates/real market feedback in real time. This would be the better strategy in all honesty.
All these data metrics that are touted to give guidance to the Fed are a very mixed bag and to some extent would explain why yellen has been all over the place flip-flopping from one course of action to the next.
But the most troubling scenario in my opinion is as follows:The data metrics that informs its decision are mostly lagging indicators. If each of them is assessed independently it advocates for a particular course of action some of which are complete opposites of each other/contradictory/in direct competition.
This therefore would give rise to the probability of the Fed being behind the curve (lagging) and worse still, pursuing the wrong policy action which would further magnify/exacerbate the economic malaise. I shudder to think of what the implications could be.
The main purpose of the stock market is to make fools of as many people as possible.