BIS And Mike Tyson Warnings Worrisome
BIS And Mike Tyson Warnings Worrisome from King World News
As we kickoff the final week of trading in June, the BIS and Mike Tyson warnings are very worrisome.
June 26 (King World News) – Here is what Peter Boockvar noted as the world awaits the next round of monetary madness: In the Bank of International Settlements (the central banks central bank) annual report, they argue that central banks should be removing accommodation not because of an expected rise in inflation that could be triggered by a shrinking of slack in labor markets but instead for market stability reasons.
They said “Even if inflation does not rise, keeping interest rates too low for long could raise financial stability and macroeconomic risks further down the road, as debt continues to pile up and risk taking in financial markets gathers steam.” They then ask, “how policy makers address these tradeoffs will be critical for the prospects of a sustainable expansion.” These comments are not a surprise as the BIS has not been a fan of modern day monetary extremism…
San Fran Fed President John Williams who does not vote said overnight in Australia that “Gradually raising interest rates to bring monetary policy back to normal helps us keep the economy growing at a rate that can be sustained for a longer time.” We’ve heard a lot from the grandstands and from some voting members that the recent moderation in the inflation stats should give Fed members pause from a further hike in September, Williams disagrees and said “Some special transitory factors have been pulling inflation down. But with some of these factors now waning, and with the economy doing well, I expect we’ll reach our 2% goal sometime next year.” He is leaning more on his concern of “overheating” with “the very strong labor market…which could eventually undermine the sustainability of the expansion.” On QT, he along with others are doing their best to tell us that it won’t be a big deal. “I hope I’ll not be perpetuating an unfair stereotype about economists if I say that boring is a virtue. Indeed, my new mantra is, boring is the new exciting.” I firmly believe that QT will be nothing like ‘watching paint dry’ and won’t be ‘boring.’ Contra to this, QE was meant to be anything but boring so why should the opposite be? If QE was meant to drive a ‘wealth effect’, what will QT do?