FEB 26, 2018
Even by the Fed’s bankrupt fantasy-world standards, this is a real eye-roller. We are reaching the point that any time the stock market falls, nearly at all, the Fed starts jabbering about the need to intervene and prop it up.
Forget about normalization, the Fed is terrified.
The Fed officially began Quantitative Tightening in October. To date, the Fed has shrunk its balance sheet by less than $40 billion. And already Fed officials are so spooked by stocks falling, that they’re promising more QE down the road… including an implicit purchasing of stocks.
To wit, on Friday, Boston Fed President Eric Rosengren stated the following:
“If LSAPs (read: QE used to buy debt instruments) are indeed not effective, then the Fed may need to take other measures”
Let’s be clear here… a major Fed official is implying the Fed should consider monetizing other assets, possibly even stocks… at a time when stocks are a mere 6% off ALL.TIME.HIGHS.
Just how vulnerable the US financial system that the Fed can’t even stomach a NORMAL 10% correction without talking about QE again?
ORIGINAL SOURCE: How Scared Is the Fed to Already Be Talking About QE Again by The Phoenix at Gains, Pains & Capital on 2/22/18