Absolutely brilliant @peejayhercules. Nothing like a bit of humor to soften the painful and surreal truth. Also very fitting considering the Fed’s verbal reconnaissance throughout today’s US session. The newly released Monetary Policy Report will coincide with comments from a bevy of Fed affiliated speakers who seem to be softening the ground for next Wednesday’s testimony before Congress. Right out of the gate, two members - Vice Chair Dudley and alternate member Rosengren - told us that interest rates will likely remain low and implied that printing presses are on pause but ready to go again if rates were to return to zero. In the next breath, we were told that because of our deficit status, there is diminished capacity for the government to react to a recession. Inflation levels are likely to hit the Fed’s target of 2%, they said. Futures traders and the machines appreciated this artful fence straddle and for now they have ES price in the value area and the S&P cash market trying to maintain a 1% gain.
The US Treasury Secretary strongly asserted during a Bloomberg interview that the growth enhancing measures instituted by the current administration will not cause inflation. The response from some well known hedge fund managers and economists was also comical.
In other news, another prominent campaign aid will plead guilty to multiple charges related to Russian interference in our recent election. Existing indictments include the charges of money laundering and conspiracy against the United States. Further indictments are also being brought simultaneously to recent plea changes by presidential campaign advisors. While recent indictments neglect to outline direct knowledge vis the central question of collusion, the association is obvious and it would serve prosecutors to go softly here. The potential importance of plea deals is that there are likely bigger fish on the independent prosecutor’s radar. Sentences can be slashed from as much as 70 years to just months under the right circumstances.
(20min delay)