Seeking Alpha

Rosengren doubts Octaper coming

  • Boston Fed chief Eric Rosengren becomes the first FOMC member to officially throw cold water on the idea of an October taper, telling an audience the government shutdown nearly takes any such move off the table.
  • For one - there the chance the Fed gets little fresh data to study (Friday's payroll report is in jeopardy). Second, the shutdown is likely to impose at least some collateral damage on the economy.
  • A member of the FOMC's dovish camp, Rosengren "strongly and unequivocally" supported the non-taper last month, and expects accommodative monetary policy for years to come.
  • Threatening the drop below 2.60% earlier in the day, the 10-year Treasury yield is now off just two basis points at 2.62%. TLT flat.
  • TLH, TLT, IEF, DTYL, DLBL, ILTB, TENZ, ITE, TLO, EDV, VGIT, VGLT, TMF, TYD, LBND, UBT, UST, TMV, TYO, DSTJ, DSXJ, SBND, PST, TBT, DTYS, DLBS, TBF, TTT, TYNS, TYBS, TBX.
Comments (9)
  • The Fed's "open communication" policy will go down as one of the worst policies the Fed has ever undertaken...!!
    2 Oct 2013, 03:28 PM Reply Like
  • Open communication is fine. It is what they are communicating that is a disaster.

     

    But, on the other hand, since the Fed is a bank owned corporation, Bernanke is doing a great job for his stockholders so they can recapitalize after the near death experience of 2008 at our expense, and he is creating a huge spread to give them great profits. We can't criticize a CEO for doing a great job---but we can liquidate his corporation.
    2 Oct 2013, 03:50 PM Reply Like
  • I didn't know seekingalpha got a bunch of conspiracy theorist.
    3 Oct 2013, 04:15 AM Reply Like
  • n l,

     

    Interesting comments.

     

    The issue is the monopoly the Fed has so far on their "notes", governmentally-authorized but privately issued. This monopoly has extended since Bretton Woods and been largely unimpeded. Now, however, the primacy is being challenged by de-facto alternatives put forth by increasingly powerful BRICs and other G-20ers. No longer satisfied to depend on Western institutions for leadership, these new powers are asserting their strength.

     

    Our seminal choice comes down to joining them in a collaborative, less disruptive fashion, or fighting the inevitability tooth and nail.

     

    The latter will extend our dominance a bit longer, but lead to disaster, while the former will still be upsetting, but put the world on a much needed cleanse, re-boot and re-birth of a phenomenal growth era.

     

    Carefully parsing the informational landscape can be useful in deciding which path we've already chosen.

     

    What is likely to come soon will be quite surprising to the majority.
    4 Oct 2013, 07:15 AM Reply Like
  • Agreed. No taper in October. Benchmark heading back down to 2%.
    2 Oct 2013, 03:36 PM Reply Like
  • They may taper a little in 2 years or so but QE will never fully end...

     

    Until it really, really ends.
    2 Oct 2013, 03:52 PM Reply Like
  • Septaper didn't happen, Octaper won't happen, I guess Notaper will ever happen.
    2 Oct 2013, 04:25 PM Reply Like
  • Whatever.

     

    QE will never really end. They may throttle it up and down over the years but it will always be a part of our economy now, since the Federal government will not be able to finance the deficit otherwise. Forget about adjusting the overnight rate - that's flat dead at 0.0% for the next few decades just like in Japan. Monetary policy is all about QE now, with a probable upwards inflation adjustment built in over the years.

     

    Today's $85 Billion per month will seem paltry in 20 years when it takes $300 Billion in QE per month to keep the government running. Maybe during "good times" the Fed will get away with only monetizing 50% of the new Treasury debt, and in bad times it will buy all the new debt plus 50% or more of what's currently outstanding. Anyone want to see what a $30 Trillion Fed balance sheet looks like? You will by 2030.
    2 Oct 2013, 04:47 PM Reply Like
  • The Regime will keep issuing Bad Money even if its ability to issue Bad Debt is limited for a few weeks.......The Republic is no more; the rule of law and the Constitution is now just a "barbarous relic" in the US Soviet
    2 Oct 2013, 05:39 PM Reply Like
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