The Fed's decision, in light of it being well received by the markets, is showing itself to be problematic for the economy.
In this video I discuss whether Powell is really looking at this in another way. Does he believe he can help things by making bonds more appealing to international capital flows?
▶️ 3Speak
Well compared to most other countries, the USD bonds have been at least able to keep its value to an extent and there is a shortage of dollars in the global economy. However will this make international capital flow in? I don't know but wouldn't they just enter normally through the stock market unless the market tanks and people are scared?
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I think the point is international capital is flowing in, just that it is heading to equities and real estate. The theory is Powell might be trying to divert some to bonds.
Not sure the validity of it but we will see. I am with Van Metre on this, I dont think interest rates go up due to this in the long run.
Posted Using LeoFinance Beta
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