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The bond market isn’t buying what Fed Chair Warsh is selling

reuters.com

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Re: The bond market isn’t buying what Fed Chair Warsh is selling

#41

Post by itake »

lowbloodsugar wrote: post #17
nikau wrote: post #12

Earlier quoted context omitted.

I can't understand the logic behind party A did something, and then blame party B for not undoing it. Not everything is a simple ctrl-z, and the blame lays squarely on who implemented it.

A mugger stabs your friend and runs off. They are bleeding out. You do nothing. That’s what he’s saying. The fact is Biden did nothing to prevent this. Including not locking the fucker up. Not stacking the Supreme Court after the Ginsberg shitshow.

I hear you, but I really don't want the government flip flopping every 4-8 years on policy.

"stuck in the past" vibes vs making progress

Re: The bond market isn’t buying what Fed Chair Warsh is selling

#42

Post by Cyph0n »

jmyeet wrote: post #8
bayarearefugee wrote: post #3

Earlier quoted context omitted.

And somehow this situation is all Joe Biden's fault, and Trump is still going to fix it, any day now. A very significant amount of American voters believe this. To this day. And their belief in this is still being reinforced by the vast majority of the "mainstream media" which they believe is left-biased, which hasn't been true for very many years at this point. This is why we are fucked and there is no way out of th…

I understand the point you're making about blind devotion to Trump but the reality is that Biden is not free from blame here, in four ways: 1. Trump in his first term created the Abraham Accords that directly contributed to the genocide that has since happened (by excluding Palestinians from the process). Biden did not reverse any of that because he is an avowed Zionist; 2. Trump blew up the JCPOA that sought to incl…

Your analysis will be downvoted, but it is absolutely spot on. One day, everyone will always have been against this.

Re: The bond market isn’t buying what Fed Chair Warsh is selling

#43

Post by lovich »

Cyph0n wrote: post #40
lovich wrote: post #20

Earlier quoted context omitted.

> At any point in the last more than a year of his term, Biden could've ended that conflict with a phone call. He did not because, again, he is an avowed Zionist. No he could not have. Israel has been a contentious ally for the US, especially while a Democrat has been POTUS because they are actually independently capable of supporting themselves and have their own internal economy and military industrial complex. The…

You can argue all day long, but at the end of the day, the US has immense ability to exert pressure on Israel, starting with withholding UNSC vetoes. The Biden admin pulled no levers whatsoever. On the contrary, it went to great lengths to cover for a genocide that it was aware of. This admin will be part of the history books, but not in a good light :)

> ... US has immense ability to exert pressure on Israel, starting with withholding UNSC vetoes.

You are 100% correct on this. That does not however mean they have the ability to end a war in one phone call

> The Biden admin pulled no levers whatsoever.

This is incorrect. Biden tried to constrain Netanyahu and did shit like making the pier to deliver aid to the Palestinians. Netanyahu responded by snubbing Biden and giving a speech to the Senate instead.

I am generally anti Israel as the nation because I believe they have been a shit tier ally who feels free to fuck around in our elections with no remorse, but acting like we had the ability to force them into actions they didn't want, without using military force, is fucking ridiculous.

Again, I think they are a piss poor ally, largely because they will not work with us, and that is largely because they have the ability to operate independently and utilize that ability constantly. If we got rid of any dependence on oil I would say fuck the whole region because every state there is in a competition over who can be the biggest assholes to us, with the possible slight exception of Jordan, and I cage that claim because I only know a decade or two of their history in relations with us and honestly mostly because one of their kings wanted to be in star trek so bad he got a spot as an extra, which implies some level of agreeing with our values.

Re: The bond market isn’t buying what Fed Chair Warsh is selling

#44

Post by seanhunter »

Speaking as a non-American, and without the lens of partisan politics, it seems incredibly obvious to me that

Kevin Warsh ... in terms of credibility as an economist, with Ben Bernanke one step to either side of Powell depending on how much you feel he was a victim of circumstances in the 2008 crisis.

That said, the current problems in the US economy are entirely out of the control of the Fed and all to do with the current administration's policies (mainly the war vs Iran driving commod vol and the on-again off-again trade tariff shuffle driving fx vol) and the long-term deficit position driving rate curve shenanigans. The AI and private credit bubbles are just adding to the anxiety. All of this ultimately feeds into domestic inflation and job market malaise.

The bond market generally doesn't take shit from anyone and it's not surprising to me that bond investors are not impressed. None of that is on Warsh.

Re: The bond market isn’t buying what Fed Chair Warsh is selling

#46

Post by nonethewiser »

RealityVoid wrote: post #37
deepsun wrote: post #25

Earlier quoted context omitted.

> This is all being exacerbated by the disastrous war in Iran No, why? US is an exporter, not importer of oil, so any price increase of crude oil is good for US. Maybe not consumers, but government (Venezuela had literal amine while exporting a lot of oil and honoring all of the international debt payments). So US must have more money to service its international debt.

What happens to the local price of oil if you are able to export the oil at a much higher price?

[dead]

Re: The bond market isn’t buying what Fed Chair Warsh is selling

#47

Post by nonethewiser »

dlcarrier wrote: post #32
jmyeet wrote: post #2

As everyone should know by now, the US government runs a massive deficit, that is the difference between tax receipts (and other income) minus expenses. The current US public debt is hovering around $40T and the annual deficit is pushing toards $2T. A lot of that $40T was borrowed at lower interest rates but let's assume for argument's sake that it was borrowed at 5%. That's $2T in interest alone every year. There's…

Don't overlook quantitative easing. Introducing more money into a monetary system has a significant inflationary effect on the money that was already present. Also, housing costs don't statically climb as interest rates go up. A decrease in market price makes up for most of the difference.

But Warsh wants to unload the Feds balance sheet so this is very much in agreement with his policy.

Re: The bond market isn’t buying what Fed Chair Warsh is selling

#48

Post by 0x53 »

miohtama wrote: post #30

Reuters attributes this to be somehow a personal flaw in Walsh. Pretty sure Jerome Powell, the previous chair, would have done exactly the same thing. In fact Jerome Powell is still in the Fed and participated in this decision.

I think the article makes a good case why the difference in chair matters - ending forward guidance - confusing wording around what the target is now (pce vs “other stuff”) - The fact that he was appointed specifically to not raise rates

None of the applies to Mr. Powell whom the market seems to have put a great deal of trust in

Re: The bond market isn’t buying what Fed Chair Warsh is selling

#49

Post by boston_clone »

seizethecheese wrote: post #18
cjs_ac wrote: post #13

Earlier quoted context omitted.

Adding to this, US foreign and military policy is increasingly chaotic, so other countries are quietly disengaging, and tariffs are slowly unravelling the US’ trade relationships. The American people voted for Trump twice : Trumpism is now an established thread in US politics, and the rest of the world is taking steps to insulate itself from the coming turmoil.

You’re right about a lot of this but there’s no evidence of trade slowing down. US exports are actually accelerating https://fred.stlouisfed.org/series/IEAXGS

Wrong metric. We saw a significant drop in _imports_ until the policies were ruled unconstitutional.

Re: The bond market isn’t buying what Fed Chair Warsh is selling

#50

Post by cjs_ac »

seizethecheese wrote: post #18
cjs_ac wrote: post #13

Earlier quoted context omitted.

Adding to this, US foreign and military policy is increasingly chaotic, so other countries are quietly disengaging, and tariffs are slowly unravelling the US’ trade relationships. The American people voted for Trump twice : Trumpism is now an established thread in US politics, and the rest of the world is taking steps to insulate itself from the coming turmoil.

You’re right about a lot of this but there’s no evidence of trade slowing down. US exports are actually accelerating https://fred.stlouisfed.org/series/IEAXGS

I expect that this is mainly due to AI and hardware. The US is about to lose its status as the world’s biggest agricultural exporter to Brazil.
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