Federal Reserve Chairman Jerome Powell Signed the Dollar’s Death Warrant

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President Trump remarked that Federal Reserve Chairman Jerome Powell has done the right thing after the Fed cut interest rates to zero, launched unlimited quantitative easing (money creation), has committed to buy $1-trillion in Treasury Bonds and mortgage-backed securities, and municipal bonds. All this adds up to a death warrant for the American economy. -GEG

It finally happened.

After the Fed cut rates to zero, launched unlimited QE, is on pace to buy $1 trillion in Treasurys and MBS in 2 weeks, backstopped pretty much every asset class and announced it would purchase bonds, loans, commercial MBS,munis as well as the LQD ETF, Trump is finally very happy with Fed Chair Jerome Powell, ironically on the same day Powell signed the dollar’s death warrant.

Here’s what Trump said on Powell.

“I am happy with him. I really think he’s caught up and he’s done the right thing. And I think ultimately we will be rewarded because of the decision he made over the last — he’s really stepped up over the last week.”

“I called him today and I said ‘Jerome, good job.”

“He was a little bit slower than what I’d have liked, in the sense of what he was doing.”

“But today I called up Jerome Powell and I said ‘Jerome you’ve done a really good job.’ I was proud of him. It took courage. Ultimately you’re going to see the fruits — he’s not finished. He’s got other arrows in the quiver.”

“I’m very happy with the job he did.”

For those who missed it, here is how Jerome Powell finally managed to get Trump to crack a smile:

  • Today, the FOMC expanded its large scale asset purchase program by promising to purchase ‘in the amounts needed.’ One week ago, the FOMC had said it would purchase $500bn of Treasury securities and at least $200bn of agency MBS; Half of that amount was fully purchases within a week.
  • The FOMC also announced that the agency MBS purchases will include agency commercial MBS.
  • The Fed also made CPFF more generous in terms of pricing and opened CPFF and MMLF to a wider set of assets.
  • The Board of Governors relaunched the Term Asset-Backed Securities Loan Facility (TALF), providing loans in exchange for ABS.
  • The Fed also announced it would buy corporate bonds and loans in both the primary and secondary markets.
  • The Fed also said it expected to announce soon the establishment of a Main Street Business Lending Program to support eligible small-and-medium sized businesses.

Read full article here…

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Boomer Lady
Boomer Lady
2 years ago

This editorial is difficult to follow because of all the titles used. What do these mean: FOMC, MBS, CPFF, MMLF, TALF, ABS, primary and secondary markets. Many people reading this article aren’t financial wizards and too bad this article couldn’t have been in more plain language.

Lynn A Goldhammer
Lynn A Goldhammer
2 years ago

Trump wants to return to the gold standard. Maybe he’s giving all this money away knowing it will be worthless anyway in the coming years… Start buying precious metals…….

Ed
Ed
1 year ago

A wise man told me recently that only hard assets will be king.