Fed About To Make A Huge Gamble Here That’s Going To End In Disaster

Thursday, June 15, 2017
By Paul Martin

KingWorldNews.com
June 14, 2017

On the heels of the Fed raised rates, today one of the greats in the business told King World News that the Fed is about to make a huge gamble that’s going to end in disaster.

Peter Boockvar: “Notwithstanding a cut in the Fed’s inflation forecast for 2017 (they kept their 2018 estimate), Janet Yellen is intent on raising rates again this year and initiating quantitative tightening. This in the face of a clear slowing in economic growth and it’s no wonder the yield curve continues to flatten. On the possibility of QT (shrinking the Fed’s balance sheet), she said it could begin “relatively soon” but I think Yellen and the Fed are deluding themselves if they think this will be “like watching paint dry” as President Harker said…

If QE was meant to incite euphoria in markets, why do they think QT (shrinking the Fed’s balance sheet) will be a nonevent? It will be a big event, even though it will start small. It will be all about psychology, and we’ll see how Yellen and Co react when markets have a hissy fit in response. Will she blink? Likely. The bottom line is that the Fed is going to try to reduce the size of its bloated balance sheet, but I predict that the market will not respond favorably and it will result in failure.”

The Rest…HERE

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