Strengthened. But the USD has strengthened for the past 5 years.
The Obama economy
- Thread starter Fractals 'R Us
- Start date
and it weakened during the last bull market, so we still have one more arrow in the quiver
QE 5? Yellen is vacillating anyway. When the VIX popped up in Jan, FED said they were open to rate reductions etc.
Ever listen to Kyle Bass? Like many prominent hedgies, he says we'll never see normalized rates again in our lifetime. National debt is too large. Quarter basis point is just for show. They won't (and can't) go any higher then 2% imo.
we will see normal rates if the fed ever loses control of the bond market, and then there will be hell to pay, so I'm rooting for a long and successful and prosperous future for the fed.
.Scratch what I wrote.
The problem is, the FED can't raise rates. Not with a 20 Trillion national debt.
Investors balk cause they know the debt is too large and won't get paid back. So they sell Treasuries and yields explode. The FED either monetizes the difference (6 Trillion) and USD loses reserve status (currency crisis). Or the FED allows 10% yield on the 5 year, and all this magic money in the stock and real estate market turns to dust. Which door do you want. 1 or 2.
Last edited:
The Fed could engineer a stock market decline, and move people into Treasuries for safe haven, while they sold those Treasuries to the market. Particularly if they wanted yields to rise to reflect a more normal policy.
That's creative. How would yields rise if everyone was moved into Treasuries? They've already floated this idea btw. Forcing pension funds into Treasuries to stave off a foreign selloff. Hello Argentina
Because the stock market fall would immediately be met with treasury purchases, allowing the Fed to offload their massive portfolio into the flight for safety. But since market falls are over pretty quickly, the move back into stocks after they have bottomed would almost certainly see rates rise.
Tsing Tao for Fed Chairman!