{"id":41901,"date":"2018-12-22T08:53:49","date_gmt":"2018-12-22T13:53:49","guid":{"rendered":"https:\/\/olduvai.ca\/?p=41901"},"modified":"2018-12-22T08:53:49","modified_gmt":"2018-12-22T13:53:49","slug":"weekly-commentary-powell-federal-reserve-lowers-fed-put-strike-price","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=41901","title":{"rendered":"Weekly Commentary: Powell Federal Reserve Lowers \u201cFed Put\u201d Strike Price"},"content":{"rendered":"<h3 class=\"post-title entry-title\"><a href=\"http:\/\/creditbubblebulletin.blogspot.com\/2018\/12\/weekly-commentary-powell-federal.html\">Weekly Commentary: Powell Federal Reserve Lowers \u201cFed Put\u201d Strike Price<\/a><\/h3>\n<div class=\"post-header\">\n<div class=\"post-header-line-1\">I have little confidence history will get this right. Today\u2019s overwhelming consensus view holds that Powell this week committed a major policy blunder. After his early-October \u201cwe\u2019re a long way from neutral\u201d \u201crookie mistake\u201d, he has followed with a rate increase right in the throes of a stock market sell-off, Credit market instability and mounting global and domestic economic risk. He stated the Fed\u2019s balance sheet runoff was stuck on autopilot, even as stunned market participants fret illiquidity. Moreover, Powell disappointed skittish markets heading right into December quadruple-witch options expiration \u2013 in the face of an impending government shutdown. How times have changed.<\/div>\n<\/div>\n<div id=\"post-body-2813810757561861926\" class=\"post-body entry-content\">\nThere was irony in Alan Greenspan joining Bloomberg\u2019s Tom Keene Wednesday for live coverage of the FOMC policy decision. It was, after all, the original \u201cGreenspan put\u201d that morphed over Bernanke\u2019s and Yellen\u2019s terms into the interminable \u201cFed put.\u201d Markets this week were desperate for confirmation that the Powell Fed would uphold the tradition of pacifying the markets and, when needed, invoking the Federal Reserve backstop. Markets were prepared to begrudgingly tolerate a rate increase. But the marketplace demanded evidence \u2013 an explicit signal &#8211; that the FOMC recognized the gravity of market developments and was prepared to intervene. Chairman Powell didn\u2019t share the markets\u2019 agenda.<\/p>\n<p>Our Federal Reserve Chairman should be commended. Under extraordinary pressure, Mr. Powell and the FOMC didn\u2019t buckle.<\/p>\n<p>Expiration for the aged \u201cFed put\u201d was long past due. For too long it has been integral to precarious Bubble Dynamics. It has promoted speculation and speculative leverage. It is indispensable to a derivatives complex that too often distorts, exacerbates and redirects risk. The \u201cFed put\u201d has been integral to momentous market misperceptions, distortions and structural maladjustment.<\/p><\/div>\n<div>\n<p>\u00a0\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Weekly Commentary: Powell Federal Reserve Lowers \u201cFed Put\u201d Strike Price I have little confidence history will get this right. Today\u2019s overwhelming consensus view holds that Powell this week committed a major policy blunder. After his early-October \u201cwe\u2019re a long way from neutral\u201d \u201crookie mistake\u201d, he has followed with a rate increase right in the throes [&hellip;]<\/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":[6358,7756,5869,303,12846,1849,4512,16888,3650],"class_list":["post-41901","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bubble-economy","tag-credit-bubble-bulletin","tag-credit-market","tag-fed","tag-fed-put","tag-financial-markets","tag-fomc","tag-jerome-powell","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/41901","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=41901"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/41901\/revisions"}],"predecessor-version":[{"id":41902,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/41901\/revisions\/41902"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=41901"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=41901"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=41901"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}