Hedge Fund CIO: “Sinners Have Become The System And Will Be Eternally Supported By Policy”
TYLER DURDEN, 28 March 2021
“At some point on the current path, policy makers will attempt to normalize,” said the CIO. We were discussing sequencing, recognizing its centrality to macro trading, investing. “They will start by attempting to taper Fed purchases,” he said, the US central bank currently creating $120bln per month and using it to purchase debt. “Perhaps they signal that they intend to lower the deficit.” But of course, that would only be after they first lift the deficit to fund America’s coming $3trln Recovery Plan. “And at that point, the clock starts ticking,” he said.
“Even if one thinks the current policy path inevitably leads to a substantial inflation, there are enough orthodox policy makers that we can be confident they’ll try to avert that outcome,” continued the same CIO. “So what we need to figure out is how far they’ll let stocks and inflation run before they’re compelled to taper,” he said. “And then we’ll need to judge how long it will take for the economy and/or market to take a deep dive.” Not long. “When they then quickly pivot and aggressively ease, their predicament will be clear for all to see.” Continue reading “Article: Hedge Fund CIO: “Sinners Have Become The System And Will Be Eternally Supported By Policy””
Donald L. Kohn became a member of the Board of Governors of the Federal Reserve System on August 5, 2002. He served as vice chairman from June 23, 2006, to June 23, 2010. He retired from the Board of Governors on September 1, 2010. In 1964, he received a bachelor’s degree from the College of Wooster. He earned a doctorate in economics from the University of Michigan in 1971. He began his career as a financial economist at the Federal Reserve Bank of Kansas City in 1970. In 1975, he came to the Board of Governors, where he was an economist until 1978. After leaving the Board of Governors, Kohn was appointed to the Bank of England’s Interim Financial Policy Committee in September 2011.