Back from vacation … I don’t have anybody who regularly reads this blog, so I’m sure nobody noticed, but there we have it. Act as if there are readers and maybe someday there will be.
Links for Monday:
- Monetary policy without a working theory of inflation. Brookings Institute
- Venezuela’s Behind on Its Debt and Facing Two Huge Bond Payments. Bloomberg
- Easy money makes house-flipping popular again … CNN
- Easy monetary policies continue in Japan as Abe re-elected. FT
- “Optics matter more than policy for the president”. Fox Business
I think the Fox Business article on the Fed Chair horse race is really telling. Ultimately, the choice of Powell or Taylor over Yellen seems to be a situation where he is choosing to appease Mnuchin or Pence over making a choice that keeps stock markets humming along. Obviously, Candidate Trump complained that rates should be higher, but why does President Trump want higher rates? Is the tax overhaul A) so good that it could balance out hawkishness from the Fed? and B) definitely going to happen?
If you bet that we’re going to have a more hawkish Fed, take the parlay with tax overhaul … I just don’t see Trump choosing to hamstring the stock market, his current favorite KPI.