{"id":15227,"date":"2015-12-13T14:04:13","date_gmt":"2015-12-13T19:04:13","guid":{"rendered":"http:\/\/olduvai.ca\/?p=15227"},"modified":"2015-12-13T14:04:13","modified_gmt":"2015-12-13T19:04:13","slug":"feds-rocket-ship-turns-hoverboard","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=15227","title":{"rendered":"Fed\u2019s Rocket Ship Turns Hoverboard"},"content":{"rendered":"

Fed\u2019s Rocket Ship Turns Hoverboard<\/a><\/h3>\n
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Over the past year, while the U.S. economy has continually missed expectations, Federal Reserve Chairwoman Janet Yellen has assured all who could stay awake during her press conferences that it was strong enough to withstand tighter monetary policy. In delivering months of mildly tough talk (with nothing in the way of action), Yellen began stressing that WHEN the Fed would finally raise rates (for the first time in almost a decade) was not nearly as important as\u00a0how fast and how high \u00a0the increases would be once they\u00a0started. Not only did this blunt the criticism of those who felt that the delays were unnecessary, and in fact dangerous, but it also began laying the groundwork for the Fed to do nothing over a much longer time period. To the delight of investors, the Fed has telegraphed that it\u00a0will adopt a “low and slow” trajectory\u00a0for the foreseeable future and move, in the words of Larry Kudlow, like “an injured snail.”<\/p>\n

I would suggest that Kudlow is a bit aggressive. I believe that if the Fed raises rates by 25 basis points next week, as everyone expects it\u00a0will, that the move will likely represent the END of the tightening cycle, not the beginning. (As I explained in my\u00a0last commentary<\/a>, the current tightening cycle actually started more than two years ago when the Fed began shortening its forward guidance on Quantitative Easing). The expected rate hike this month has long been referred to as \u201cliftoff\u201d for the Fed, an image that suggests the very beginning of a process that eventually puts a spacecraft into orbit. But, in this case, liftoff will be far less dramatic. I believe the Fed\u2019s rocket to nowhere will hover above the launch pad for a considerable period of time before ultimately falling back down to Earth.<\/div>\n
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…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Fed\u2019s Rocket Ship Turns Hoverboard Over the past year, while the U.S. economy has continually missed expectations, Federal Reserve Chairwoman Janet Yellen has assured all who could stay awake during her press conferences that it was strong enough to withstand tighter monetary policy. In delivering months of mildly tough talk (with nothing in the way […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[303,305,431,451,534,963],"class_list":["post-15227","post","type-post","status-publish","format-standard","hentry","category-economics","tag-fed","tag-federal-reserve","tag-interest-rates","tag-janet-yellen","tag-monetary-policy","tag-peter-schiff"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15227","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15227"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15227\/revisions"}],"predecessor-version":[{"id":15228,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15227\/revisions\/15228"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15227"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15227"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15227"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}