A Word About Tapering and Who the Fed is In Bed With

Tapering

At long last the world presumes the Fed will finally taper.

What a delusional statement. They'll never taper (just lip service and lie about it). They'll never raise rates or everything collapses. They will rig the market higher up until the point of collapse.

— Kevin Kuntz (@KevinKuntz2) August 24, 2021

Hike After Tapering Complete? 

How long will that take?

OK, so Goldman thinks the Fed will start tapering in Nov. 2021, at $15B a month ($10B UST, $5B MBS.) Whatever.

Even assuming they don't buy another $240B+ or so in the meantime, which they will, to get to 2008 levels would take about 42 YEARS.

This will never happen. pic.twitter.com/ewRoQNELLF

— Rudy Havenstein, monetary policy pioneer. (@RudyHavenstein) August 24, 2021

What About Fed Chair Jerome Powell?

Hey, thanks for asking.

Is her job to let Powell run all over her or it it her job to get in bed with him? Is there a difference?

There is no independent Fed.

Powell will either hop into bed with Biden and Yellen or he will be replaced.

Real Troika: Powell (or replacement), Biden, Yellen https://t.co/NXRQdqmUya

— Mike "Mish" Shedlock (@MishGEA) August 24, 2021

What's the Troika?

My comment regarding the Troika pertains to a comment made by former Fed Chair Ben Bernanke.

He once stated the only three opinions that mattered were those of the Fed Chair, the Vice-Chair, and the President of the New York Fed.

Currently, that would be Jerome Powell, Richard Clarida, and John Williams, respectively.

New Troika

Given there is no independent Fed and Powell may be replaced if he does not go along with Biden Administration wishes, it is more realistic to think of the Troika as Powell, Treasury Secretary and former Fed Chair Janet Yellen, and President Biden.

"Powell will either hop into bed with Biden and Yellen or he will be replaced."

Progressives right now are putting pressure on Biden to replace Powell with someone more to their liking.