Leaning toward a bump on the scary index. That drop is too sudden to be absorbed and stay within the corridor, is one way to think it. It raises blue bar probability a measurable degree.
What should the Fed do?
Either target the post MMT or do a can kick. I would lower IOER and sell long term treasuries. This is forcing the MMT, send the bank reserves outto straighten this crap, or don't come back.
Or, lower the IOER a quarter, and leave it at that, the long term deal on can kick.
The recent drop in the one year treasury makes a quarter point drop workable, one way or the other. The New, non-profit Fed, a secret organization, needs to get in cahoots with the debt cartel, and push a fair deal on the Senate, emphasizing the government accounting reform implied. The House will go along, but the Senate has to see the larger trade off between productivity gains and default costs.
What should the Fed do?
Either target the post MMT or do a can kick. I would lower IOER and sell long term treasuries. This is forcing the MMT, send the bank reserves outto straighten this crap, or don't come back.
Or, lower the IOER a quarter, and leave it at that, the long term deal on can kick.
The recent drop in the one year treasury makes a quarter point drop workable, one way or the other. The New, non-profit Fed, a secret organization, needs to get in cahoots with the debt cartel, and push a fair deal on the Senate, emphasizing the government accounting reform implied. The House will go along, but the Senate has to see the larger trade off between productivity gains and default costs.
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