Powell Warns Of “Rising Leverage & Elevated Valuations”; Dudley, Rosengren: QE (Or More) Will Be Back

Friday, February 23, 2018
By Paul Martin

by Tyler Durden
Fri, 02/23/2018

Ahead of Fed Chair Powell’s first semi-annual monetary policy report to Congress next week (brought forward to 2/27), The Fed has released his prepared remarks warning that “valuations are still elevated across a range of asset classes” and fears “signs of rising non-financial leverage.”

But before Powell’s remarks were dropped, both Dudley and Rosengren are on the tape this morning talking super dovish about QE as “useful to have in the toolkit for those times when the short-term interest rate tool may not be available,” adding that The Fed is “quite likely” to require large-scale asset purchases again because real rates will remain low due to slow productivity and labor-force growth.

And adding that “if LSAPs are indeed not effective, then the Fed may need to take other measures.”

The Rest…HERE

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