If you read the fine print in his talk.
Price variation he needs to cover is about 3-4%, at most. He is planning on a large event in the future, like last time. He should go ahead and plan on burning 15% of GDP in treasury bonds over the next 15 years. That is the unsaid, the prohibited, but it is on Powell's mind, he is not sure Congress can cover interest rates and expects volatility in the Swamp.
What is the big event?
The outcome of the budget battles which look to be two quarters of unknown. The results can reset the ten year yield, up or down, suddenly. Powell can suddenly drop the IOER and give the kickbacks a boost, helping treasury. On on a tax and sequester, he can celebrate and sell off some of those bonds.
Two quarters is the minimum, and it depends on Nancy containing AOC and her ice melters. I doubt the pension stampedes can be held back longer than two quarters.
The Fed is MMT
So Powell might say, "Hey let us drop a quarter point and give Congress a break while negotiating the budget". Like a preward, a hopeful bet. Take the fork in the road.
What is the big event?
The outcome of the budget battles which look to be two quarters of unknown. The results can reset the ten year yield, up or down, suddenly. Powell can suddenly drop the IOER and give the kickbacks a boost, helping treasury. On on a tax and sequester, he can celebrate and sell off some of those bonds.
Two quarters is the minimum, and it depends on Nancy containing AOC and her ice melters. I doubt the pension stampedes can be held back longer than two quarters.
The Fed is MMT
So Powell might say, "Hey let us drop a quarter point and give Congress a break while negotiating the budget". Like a preward, a hopeful bet. Take the fork in the road.
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