"Meanwhile, the debate over the Federal Reserve's stance on rate...

"Meanwhile, the debate over the Federal Reserve's stance on rate cuts continued to rumble after Chair Jerome Powell and fellow policymakers turned more hawkish last week in the face of persistent inflation."

This guy (below) reckons the central banks (everywhere) are preparing to change the bank cash rules which will make trillions available to banks for buying gov treasuries and lending out.

Furthermore, he claims that if they don't get a crisis, to allow the fed to change the banking rules, they are going to do it anyway without telling anyone. (Goto position 5:00 in the video and listen to what he has to say on the SLR there.) Obviously this is about creating more buyers for US treasuries to avoid a debt crisis. - And all the other central banks want to jump onboard too.

This could be the reason why Powel has turned hawkish - because it is like QE and it is going to cause more inflation in the long run.

Basically, they want to exclude treasuries from the bank cash formula (ie the SLR). This means a bank may not be allowed to lend out more money, because of the cash requirement, but it can still buy trillions in gov bonds, because treasuries don't count on the SLR formula anymore.

How will this playout in the market? Since this printed money is going into government debt, and not into people's pockets, the inflation effect should be delayed. Also, higher for longer interest rates and no rate cuts should be bad for debt laden companies and should put downward pressure on the market (which has been expecting rate cuts). Bonds should spike as the demand increases and then tank as inflation comes back later on.

Mind you, we could still get a banking crisis - which is what Powel prefers. Many small to mid sized banks are hanging on by the fingernails in the hope that rate cuts happen soon. Powel could be deliberately pushing them over the edge with his hawkish remarks to trigger a crisis.

The next fed meeting is 30 April. We should know more after that.