This will be the last FOMC as we knew them. From here on, a politicised Fed will be dancing to the President’s tune. That may be a good thing – but probably not. It may prove great news for markets, but a route to economic stagnation. It may also trigger a correction.
Stocks are looking forward to a double dose of joy from strong tech earnings and the Fed close to end of the tightening phase, but these may be Potemkin Markets.. foundations in the sand and little behind the façade… says the grumpy bond trader…
Fed Minutes hint at Taper this year, but markets are pricing for it not happening: a slowing global economy, competitive pressures, the market’s addiction to debt and Covid will all conspire to stop Central Banks tightening. They might be right.
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