by He might be on to something here: With almost no inflation, our Country is needlessly being forced to pay a MUCH higher interest rate than other countries only because of a very misguided Federal Reserve. In addition, Quantitative Tightening is continuing, making it harder for our Country to compete. As good..... — Donald J. Trump (@realDonaldTrump) July 22, 2019 You can see in this graph below that the 2018 policy rate increases caused significant unrealized losses in the large amounts of Tier1 quality assets that banks have to hold to pass the CCAR ('stress tests') post GFC; and the resultant mini-crash in equity share prices into year end ...The new post GFC CCAR policy is magnifying the effect of the changes in the policy rate (two uncoordinated policies) in contrast to that of
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He might be on to something here:
With almost no inflation, our Country is needlessly being forced to pay a MUCH higher interest rate than other countries only because of a very misguided Federal Reserve. In addition, Quantitative Tightening is continuing, making it harder for our Country to compete. As good.....— Donald J. Trump (@realDonaldTrump) July 22, 2019
You can see in this graph below that the 2018 policy rate increases caused significant unrealized losses in the large amounts of Tier1 quality assets that banks have to hold to pass the CCAR ('stress tests') post GFC; and the resultant mini-crash in equity share prices into year end ...
The new post GFC CCAR policy is magnifying the effect of the changes in the policy rate (two uncoordinated policies) in contrast to that of pre-GFC ... it does not appear policymakers are aware of this change ...
We'll soon see if the Fed takes back the two December and September 2018 0.25% increases if it has the opposite (bullish) effect this year...