Este comentario de un usuario del FT sobre la posibilidad de que la FED inicie el tapering es muy interesante. Fijaos en que la inflación subyacente este año dobla a la de 2013, es el doble :
FT: "Moreover, Fed officials do not want to repeat the experience of the 2013 “taper tantrum” — a sharp sell-off in Treasury debt triggered by the Fed’s plans to wind down its quantitative easing following the financial crisis. “If you’re the person making the decision as Powell is, 2013 probably looms large for you — maybe larger than it should. You don’t want to be the author of another tantrum, that’s surely on their minds” said Jeremy Stein, an economist at Harvard University and a Fed governor at the time."
There is an almost delicious irony in this present situation.
In January 2019, when the Fed released the full transcripts of all the FOMC meetings in 2013, they revealed that one Jerome Powell who had been elected to his first term as a Fed Governor in 2013, argued in the January 29/30 2103 FOMC meeting for a plan to "taper bond purchases under the then ongoing QE and to end all purchases by that year-end.
At the April 30/May 1 2013 FOMC, Powell again argued that the Fed should take “the next reasonable and plausible opportunity to taper.”
And all hell broke loose on May 22, 2013 when then Fed Chair Bernanke almost innocuously said in reply to a question from a lawmaker during his testimony to the Joint Economic Committee to to the US Congress: “If we see continued improvement and we have confidence that that’s going to be sustained then we could in the next few meetings .... take a step down in our pace of purchases."
The Fed had to go into fire-fighting mode and try to halt the big spike in UST yields that followed and the tightening of financial conditions, by repeatedly highlighting that any Taper timing would be determined by the economic conditions and that taper was completely separate from rate-increases, and that interest rates would still stay low for an extended period of time.
The Fed did not do anything in its June and July 2013 meetings but in the September 17-18 2013 FOMC, Powell was back calling for a start of the Taper, along with some others.
Finally in the December 2013 FOMC, the Fed took the first baby step with a taper of $ 10 Bn from its then $ 85 Bn monthly purchases of USTs and MBSs, a full 7 months after the Bernanke-induced "Taper Tantrum" and almost a full YEAR from the time that Fed Governor Jerome Powell started arguing about the need for a Taper to bring the QE bond purchases to a close !
WSJ writing on this subject said: "Some officials, including Mr. Powell, were wary of an open-ended bond-buying program and wanted to lay out a plan to bring the bond purchases to a close. They worried that the Fed’s monthly purchases of $85 billion in Treasury and mortgage-backed securities could prompt investors to take dangerous risks, which could lead to another financial crash."
So while Jay Powell the Fed Governor argued repeatedly in 2013 for a Taper and end to QE it would be interesting to see how the outlook and viewpoint has evolved now that he is in the decision-maker's seat himself. Thinking about thinking about Taper this week ? Maybe. Accept and highlight the same in the FOMC Statement on June 16, 2021 or in the Press Conference ? Errr ...........
Nov 2013 (just prior to Taper) May 2021
Unemployment Rate 6.9% 5.8%
Core PCE Inflation 1.6% 3.1%
Fed Balance Sheet $ 3.75 Trillion $ 7.95 Trillion
Monthly Fed QE $ 85 Billion $ 140 Billion
US Household Net Worth $ 79.5 Trillion $ 136.9 Trillion
Median single family Existing
Home Price $ 193 K $ 347 K
NASDAQ 3,450 14,000
Sources:
