Some Investors Bet Fed Could Lift Rates to
Two-Decade High
https://www.wsj.com/articles/some-investors-bet-fed-could-lift-rates-to-two-decade-high-11667945255
Investors also worry that 6% rates could send the economy into a deep and lasting recession, with rising unemployment and a long road to recovery.
https://www.wsj.com/articles/some-investors-bet-fed-could-lift-rates-to-two-decade-high-11667945255
Investors also worry that 6% rates could send the economy into a deep and lasting recession, with rising unemployment and a long road to recovery.
Can the Fed fight inflation without triggering a meltdown?
https://www.washingtonpost.com/us-policy/2022/11/02/federal-reserve-financial-crisis/
Steven Pearlstein notes:
What Chair Jerome H. Powell and his colleagues are now discovering is that it is a lot easier to inject trillions of dollars into the economy to stave off calamity than to sop that money back up after the crisis has passed. Once banks, businesses and investors come to rely on that money and build their financial arrangements around it, any effort to withdraw it can cause a “dash for cash” as people rush to sell their holdings before prices fall even further.
And as with any old-fashioned bank, if everyone shows up at the shadow banking system demanding their money back, they will discover that the money is not there — not because it has been lost, but because it has been lent to someone else. The essence of every financial crisis is some form of a run on the bank.
The challenge the Fed now faces is figuring out how to remove its cash from the financial system without spooking everyone else into removing theirs.
My take:
Will financial stability concerns derail the Fed’s inflation fight? By Vivekanand Jayakumar | The Hill, Oct 17, 2022
https://thehill.com/opinion/finance/3691022-will-financial-stability-concerns-derail-the-feds-inflation-fight/
https://www.washingtonpost.com/us-policy/2022/11/02/federal-reserve-financial-crisis/
Steven Pearlstein notes:
What Chair Jerome H. Powell and his colleagues are now discovering is that it is a lot easier to inject trillions of dollars into the economy to stave off calamity than to sop that money back up after the crisis has passed. Once banks, businesses and investors come to rely on that money and build their financial arrangements around it, any effort to withdraw it can cause a “dash for cash” as people rush to sell their holdings before prices fall even further.
And as with any old-fashioned bank, if everyone shows up at the shadow banking system demanding their money back, they will discover that the money is not there — not because it has been lost, but because it has been lent to someone else. The essence of every financial crisis is some form of a run on the bank.
The challenge the Fed now faces is figuring out how to remove its cash from the financial system without spooking everyone else into removing theirs.
Will financial stability concerns derail the Fed’s inflation fight? By Vivekanand Jayakumar | The Hill, Oct 17, 2022
https://thehill.com/opinion/finance/3691022-will-financial-stability-concerns-derail-the-feds-inflation-fight/