In Surprising Reversal, Pace Of Global Rate Hikes Approaches Pre-Lehman Period
Most of the post-Lehman era has been characterized by unprecedented easy monetary policy meant to inflate asset prices, and sure enough after 705 rate cuts, and $12.4trillion in QE, the S&P is just shy of its all time highs. However, over the past year, a different dynamic has taken place: the Fed’s tightening cycle and ongoing rate hikes have resulted in a sharp drain of USD-liquidity across the globe.
Meanwhile, with the ECB set to end its QE and the BOJ taking tentative steps toward tightening while engaging in a shadow taper of its own QE, central bank balance sheets are set to shrink for the first time since the financial crisis.
It is this tightening in financial conditions in general, and dollar liquidity in particular that ultimately has been the catalyst that led to a near record divergence in FX volatility between emerging markets and developed nations, incidentally that last time we saw such deltas was just after 9/11 and the great financial crisis.
— Read on www.zerohedge.com/news/2018-08-18/pace-global-rate-hikes-approaches-pre-lehman-period
When one strips away the lies about central banks’ “inflation and employment” mandates and focuses on what they really do – which is to keep asset prices artificially supported and volatility suppressed – the motive behind virtually every central bank act becomes readily apparent: preserve ( and increase, if possible ) confidence in the market and economy, while saying anything and everything that helps achieve this, or in other words , lie but don’t get caught.
Source: “None Of It Was True”: 103 Years Later, The FT Admits It Lied And Colluded With The Bank of England
Authored by Mike Shedlock via MishTalk.com, Yesterday, I commented on “transitory” factors holding down inflation. Today, the Wall Street Journal reports Global Inflation Hits Lowest Level Since 2009 . The Organization for Economic Cooperation and Development said Thursday that consumer prices across the G-20—the countries that account for most of the world’s economic activity—were 2% higher than a year earlier.
Source: Central Banks Stumped As Global Inflation Hits Lowest Level Since 2009 – Here’s Why