Fed’s Lacker Admits “Asset Bubble” – Reluctant To Pop It

January 12, 2014 Leave a comment

Fed’s Lacker Admits “Asset Bubble” – Reluctant To Pop It

Tyler Durden on 01/10/2014 09:56 -0500

While we have been told again and again that there are no asset bubbles – although th emost recent FOMC statement referenced concerns over small-cap mulitples and covenant-lite loan issuance – it seems the Fed’s Jeff Lacker just let slip some ugly truthfulness…Answering questions after a speech proclaiming growth ahead and rising inflation, he said:*LACKER RELUCTANT FOR FED TO ‘PRICK’ ASSET-PRICE BUBBLES

Well there it is. There are asset bubbles? But Lacker – who has been anti-QE to some extent – knows that if the Fed moves to actually do anything about it (other than jawbone), it’s all over. Perhaps as more realize the transition from a Bernanke Put to a Yellen Collar has occurred, there will be no need to jawbone any longer.

But jawbone on they will as open-mouth operations try to persuade investors that strong forward guidance is just as effective as printing 100s of billions of USDs….

LACKER SAYS MARKET EXPECTATIONS THAT INTEREST RATES WILL REMAIN LOW MAY
BE BIGGER DRIVER OF MARKET LIQUIDITY, EQUITY PRICES THAN BOND BUYS

 

Filed under Macro Trends

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