Is The World About To Hurtle Into Another Period Of Massive Financial Instability?

Wednesday, December 14, 2016
By Paul Martin
December 13, 2016

Ahead of this week’s FOMC announcement, the world awaits the next round of market chaos.

Here is what Peter Boockvar wrote today as the world awaits the FOMC’s decision: A new political regime took hold on November 8th and tomorrow we’ll see if there is any acknowledgement of that from the FOMC and whether we’re about to embark on a new monetary regime. I would define ‘new monetary regime’ as anything more aggressive than the pace of one rate hike per year. I’ve argued that a new market driven interest rate regime (end of the bond bull market) began in August when the BoJ started to let its yield curve steepen, followed by other factors even before Trump won. Trump’s victory and upcoming policies only solidifies the rate regime change. Is the Fed listening to the message the markets are sending? The story of 2017 will be the butting of heads between the fiscally driven growth initiatives vs the inevitable rise in interest rates…

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