Hawks unleashed could rock the markets

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Quotable

“For theories and schools, like microbes and corpuscles, devour one another and by their strife ensure the continuity of life.”

­__Marcell Proust

Commentary & Analysis

Hawks unleashed could rock the markets

       Run pug run; hawks are in the house!

       Run pug run; hawks are in the house!

The chief hawk in this narrative is Stanford Economics Professor John Taylor (JT); aka the creator of the Taylor Rule for monetary policy.  Should President. Trump pull a surprise out of his hat this week (Would it be a surprise if President Trump didn’t surprise?), and appoints JT head of the US Federal Reserve Bank market will most likely get rocked in a big way as the monetary hawks emerge from their well-guarded cages. 

According to the Taylor Rule, the current target for the fed funds rate should be about 2.94% instead of the paltry 1.15% it is now.  Mr. Taylor’s appointment wouldn’t suggest an immediate 200 basis point rate hike from the Fed; but it would suggest future rate hikes will be faster and more furious than now anticipated.

Thus, here is how the market would likely react: ....READ MORE

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