Generally the movie involves surprises, love and violence, and all this coming to the risk on markets very soon. The financial blog space expects the FED to do some sort of Yield Curve Control (YCC) to hold interest rates down while inflation moves higher, this is allowing inflation to run hot. The FED wishes to do this over time to deflate the debt away. Very similar to the 1940's post WW2, yields were pegged to 2% and risk on assets went sky high.
However Peter Boockvar suggest the FED may soon learn it is not in control and the true king of the markets is the BOND MARKET. Peter says simply the bond market is telling the FED to bite me!
The FED is not used to taking second fiddle to any challenger, and you can bet the FED will not give up the chair of market king easily, and they will try to smash the bond market into submission with forms YCC, TWIST and more QE.
Of course if the FED fails, all markets will be repriced to the new cost of money and you can bet the market violence will be spectacular.
The pressure of future inflation agrees with current bullish up swing in the cycle below.
Long term cycles, bullish for higher interest rates, inflation, commodities. Notice the 1940's period and how flat interest rates were, and what happened in the 1950's and after.
Original Post: https://ift.tt/30gJGR5
No comments:
Post a Comment