In the Trenches: Cake

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Wraith
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Wraith

An excellent article from Mr. Cecchini. A lot of his conclusions and beliefs are ‘domestic cozy’ to me (to steal a term from Ribbonfarm. I just have a hard time with one thing: “I also do not believe that the current situation is analogous to the early 1970s when President Nixon appointed Arthur Burns as the Chairman of the Federal Reserve. While we will leave the reader to his or her own conclusions about the similarities between Donald Trump and Richard Nixon, it would appear that Chairman Powell is far less naïve than the academic, Burns. ” Hmmm…well your point is well taken. However, Powell may not be as ‘academic’ as Burns, but on the other hand he spent a lot of time at Carlyle Group, and has interests residing in making sure that PE and leveraged loans work and all his buddies and former colleagues are happy. Secondly, there are just so many signs that the ‘philosophical change’ that Mr. Cecchini cites as a precursor to a near term dovish set of expressions is underway and has been underway for some time. The Powell pivot, the new language surrounding ‘effective lower bound’, the reports about WH lawyers trying to figure out how to remove Powell under various circumstances. This all falls into Ben’s great advice “Ask why am I reading this now.” Peter was bang on regarding no June cut, that made sense to me, but Fed Fund Futures also had that as a consensus bet. The Fed has… Read more »

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