op-ed by prominent\u00a0<\/a>“hawks” Stanley Druckenmiller and Kevin Warsh urging the Fed to halt its tightening cycle, a chorus of cautions has emerged on Wall Street, warning that the Fed has done a “policy error”, while calls that the Fed may have gone too far in raising borrowing costs are gathering momentum, with some going so far as accusing Powell of being at “peak error” right now.<\/p>\nCourtesy of Bloomberg, here\u2019s a collection of those of who have been sounding the alarm on Fed policy beyond Trump:<\/p>\n
Priya Misra,\u00a0<\/strong>head of global rates strategy at TD Securities LLC in New York<\/em><\/p>\n\u201cI think it\u2019s a notion of a Fed policy mistake. The Fed is signaling continued hikes, which is a mistake. The market was already worried about that. Unfortunately the Fed didn\u2019t alleviate many of those fears.\u201d<\/p><\/blockquote>\n
Scott Minerd,\u00a0<\/strong>chief investment officer at Guggenheim Partners<\/em><\/p>\n\u201cAs the curve keeps flattening on us, it\u2019s telling us that monetary policy is being too restrictive and that we don\u2019t have enough reserves in the system to stimulate the economy.\u201d<\/p><\/blockquote>\n
Donald Selkin,\u00a0<\/strong>chief market strategist at Newbridge Securities, in an interview earlier this week<\/em><\/p>\n\u201cThe issue is whether the Fed is providing tough love to the market. He\u2019s saying everything is great, the economy is doing great, but the market, which is forward looking, is dropping. Something\u2019s not right. The Fed has made many policy mistakes in the past. I guess when the fourth quarter earnings come out, whether there\u2019s lower guidance, that\u2019s what everyone will look for.\u201d<\/p><\/blockquote>\n
David Bianco,\u00a0<\/strong>chief investment officer at Deutsche Asset Management, in a note to clients<\/em><\/p>\n\u201cThe Fed must make the right decision for the economy, not its credibility or autonomy. The ability to raise interest rates is an awesome power and no hike should be made without careful consideration of the risks to growth, wealth and the jobs at stake. This new Fed Chair and committee must stop treating higher rates as no big deal and more clearly answer these questions to regain market confidence: What are the benefits of further hikes? What are the risks? Which inflation indicator gives you the most concern?\u201d<\/p><\/blockquote>\n
Gene Tannuzzo,\u00a0<\/strong>deputy global head of fixed income for Columbia Threadneedle Investments<\/em><\/p>\n\u201cI think they\u2019ve done bit of a disservice by trying to minimize the impact of the balance sheet that\u2019s going on in the background.\u201d<\/p><\/blockquote>\n
Jim Bianco,\u00a0<\/strong>president of Bianco Research LLC in Chicago<\/em><\/p>\n\u201cThe Fed sees the market is solidly screaming at them \u2019wrong policy\u2019 and they are trying to understand that. Not Trump. And if they do not get the messaging to the markets right, stock go down further and Wall Street will turn on Powell.<\/p><\/blockquote>\n
Michael Churchill,\u00a0<\/strong>research analyst at Churchill Research<\/em><\/p>\nThe Fed is \u201cprobably at peak error right now<\/strong>,\u201d he wrote in a note. \u201cThe Fed\u2019s intellectual and policy posture is so bad now that it can probably only get better. The Fed\u2019s errors are easy to demonstrate, which makes it likely they will be rectified sooner rather than later.\u201d<\/p><\/blockquote>\nOf course, the simple truth is that it’s not Powell who is at peak error: Powell is merely on the receiving end of a late-cycle expansion which after initially levitating thanks to trillions in easy monetary policy, was artificially boosted for the past two years with the tailwind of Trump’s fiscal stimulus which however is not only fading now, but leaving the economy facing the pernicious consequences of accelerating (and delayed) wage growth and a labor market in which there are simply not enough vacant positions, while stocks are pricing in the tighter financial conditions that accompany central banks soaking up liquidity.<\/p>\n
The result is that Powell is now blamed for the sins of his predecessors, and that his forced departure would only make matters worse sending stocks crashing even more, ultimately culminating with Trump becoming the fall guy for years and decades of disastrous monetary policy which started with Alan Greenspan’s bubble blowing ways and extended not just with Bernanke and Yellen, but spread globally into China’s unprecedented credit expansion as well as the ultra-easy monetary policies of the ECB, BOE, SNB and so on.<\/p>\n
Alas the party is now ending, whether with or without Powell, and the only hope Trump may have to kick the can a little but longer and have the Fed launch one final QE episode, is to crush the market, unleashing another round of ultra-easy policy. Considering the overnight events, Trump may have finally figured out that to save the market, he will first have to destroy it.<\/p>\n
___
\nhttps:\/\/www.zerohedge.com\/news\/2018-12-23\/its-not-just-trump-wall-street-chorus-calling-powells-scalp<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"It’s Not Just Trump: A Wall Street Chorus Is Calling For Powell’s Scalp<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-111872","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/stateofthenation2012.com\/index.php?rest_route=\/wp\/v2\/posts\/111872","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stateofthenation2012.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stateofthenation2012.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stateofthenation2012.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stateofthenation2012.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=111872"}],"version-history":[{"count":0,"href":"https:\/\/stateofthenation2012.com\/index.php?rest_route=\/wp\/v2\/posts\/111872\/revisions"}],"wp:attachment":[{"href":"https:\/\/stateofthenation2012.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=111872"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stateofthenation2012.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=111872"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stateofthenation2012.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=111872"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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