“The Tide Is Going Out” – JPMorgan’s Dimon Warns QE Unwind Could Be Far Worse Than Fed Hopes
by Tyler Durden
ZeroHedge.com
Jul 11, 2017
Janet Yellen confidently stated at the last FOMC press conference that The Fed will start unwinding its massive balance sheet “relatively soon” and Patrick Harker, the Philadelphia Fed president, has said the process will be so dull that it is equivalent to watching paint dry.
Not everyone agrees…
Louis Crandall, an economist at Wrightson Icap, said at the time:
“When they [the Fed] launched QE, they were confident about the direction of the impact but cautious about projecting the precise magnitude. They should be even more cautious about estimating the impact of unwinding the portfolio, as they have even less control over the outcome.”
The unwind will be lumpy for sure…
And today, none other than JPMorgan CEO Jamie Dimon poured some more cold water on The Fed’s complacency at this ‘storm in a teacup’. Speaking at a conference in Paris this morning, Bloomberg reports that Dimon warned…
“We’ve never have had QE like this before, we’ve never had unwinding like this before.”
“Obviously that should say something to you about the risk that might mean, because we’ve never lived with it before.”
“When [the unwind] happens of size or substance, it could be a little more disruptive than people think.”
“We act like we know exactly how it’s going to happen and we don’t.”
The Rest…HERE
