"next move in rates well could be down!"
Interesting and very curious idea prompted by, according to Zero Hedge, a much more intense tightening that the FED was expecting. You see, they, the FED, are rolling off existing gov debt in their portfolio of assets causing money to be withdrawn from circulation and excess reserves by the banks to abruptly fall.
I classify this as being very curious because what Zero Hedge was telling us a few days ago was this:
Inflation Alert: The Velocity Of Money Has Finally Bottomed
by
Tyler Durden
Thu, 02/08/2018 - 14:57
192
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Forget the Trump tax cuts, the Senate budget deal, the Fed's Quantitative Tightening and the collapse in foreign buying of US Treasuries: after years of dormancy, the biggest catalyst for a sharp inflationary spike has finally emerged, and it is none of the above. Behold:
the velocity of money...
In any case, for whatever reason, after declining for nearly a decade, the Fed's greatest wish after all these years appears to have been granted, amd it now appears that the velocity of money has finally bottomed, and is, in fact rebounding. And, in couldn't come at a worse time: with Trump dumping trillions into the economy to stimulate it further, the Fed is now painfully behind the curve, which means that chai
r Powell will find himself rushing to hike rates at virtually every opportunity to avoid getting Volckered."
You see, one day the Fed has to rush to hike rates then the next to rush to lower them back to zero.
What a circus this is, and it is free.
