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Will fed taper
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I expected the Fed have to do something regarding inflation, since it puts political pressure on the Biden administration, which Powell has to please. They can either slow down QE purchasing, using ONRRP as buffer, also influence USD on FX, to lower import price.
However, I do expect them to either resume easing, or just maintain current policy. Given how big this bubble has become, in order to continue to keep assets prices high, they cannot tighten. Either correction in US equities, or the fear of correction will put the Fed back into easing mode.
Only pressure for US to tighten is not inflation, that can be dealt with higher USD. The pressure is from China ability to tighten easily given overflowing US liquidity and confidence in USD (a.k.a. global currency status).
Disclaimer: I am not a professional licensed investment advisor, these are all personal opinions, not investment advice, please perform your own research, and contact your investment advisor for your investment needs.
However, I do expect them to either resume easing, or just maintain current policy. Given how big this bubble has become, in order to continue to keep assets prices high, they cannot tighten. Either correction in US equities, or the fear of correction will put the Fed back into easing mode.
Only pressure for US to tighten is not inflation, that can be dealt with higher USD. The pressure is from China ability to tighten easily given overflowing US liquidity and confidence in USD (a.k.a. global currency status).
Disclaimer: I am not a professional licensed investment advisor, these are all personal opinions, not investment advice, please perform your own research, and contact your investment advisor for your investment needs.
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