I do not think #Powell broke fresh ground indicating that the balance sheet reduction was on autopilot. The #Fed has intimated it before. It indicated that the balance sheet is not long a policy signal and that its reduction was technical in nature and would continue unless, the Fed approached the zero- bound again.
I also disagree about transparency being oversold. Given the immense power of the Fed and its relative insulation, transparency it seems to me, is integral to its accountability What is it doing and why? I get strategic ambiguity and can accept temporal inconsistencies, but I for one am happy that the purposeful obfuscation of the #Greenspan era is over--that "Secrets of the Temple" is a period piece. The system evolves.
Alan #Greenspan was masterful in his monetary policies. Yes, you could say that I am seeing the possibility of #stagflation. There is #inflation potential but not much output potential. Yet, I tend to see it not lasting very long, before a contraction takes hold. And Gary, you make a great point about the risk of killing the collateral, which is a headwind against output growth as interests rise.
Prof, Alan #Greenspan has been reading you. He says #stagflation is his fear, which you seem to be saying as well. Killing the collateral could make things even worse than that.
Some Thoughts On What Is Happening
I do not think #Powell broke fresh ground indicating that the balance sheet reduction was on autopilot. The #Fed has intimated it before. It indicated that the balance sheet is not long a policy signal and that its reduction was technical in nature and would continue unless, the Fed approached the zero- bound again.
I also disagree about transparency being oversold. Given the immense power of the Fed and its relative insulation, transparency it seems to me, is integral to its accountability What is it doing and why? I get strategic ambiguity and can accept temporal inconsistencies, but I for one am happy that the purposeful obfuscation of the #Greenspan era is over--that "Secrets of the Temple" is a period piece. The system evolves.
No, Mr. President, there isn’t a Santa Claus
@[Martin Hutchinson](user:28913), why do you suppose #Greenspan did nothing to correct the problem even after he identified the issue early on?
Projecting A Fed Rate Path
Alan #Greenspan was masterful in his monetary policies. Yes, you could say that I am seeing the possibility of #stagflation. There is #inflation potential but not much output potential. Yet, I tend to see it not lasting very long, before a contraction takes hold. And Gary, you make a great point about the risk of killing the collateral, which is a headwind against output growth as interests rise.
Projecting A Fed Rate Path
Prof, Alan #Greenspan has been reading you. He says #stagflation is his fear, which you seem to be saying as well. Killing the collateral could make things even worse than that.