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Link from Friday: Manages to avoid saying "If you thought small changes in gently rising rates were scary, wait until you understand that..."... but, succeeds, still in connecting the dots between events (market failures) seen in commodities like oil and nickel, recently, and market reality in the major market indexes... as "liquidity" issues continue to be imposed... now even restricting "the most liquid market in the world". Also avoids drawing attention to that POINT... as it matters in relation... as the Fed's minor tinkering with rate changes (still being MOPE'd up as hugely significant even when not remotely close to matching the rate of inflation... making the "raises" we've seem... as "loosening a bit less fast" in real terms... versus tightening at all). That impact in rates, still, is chump change compared to the far more massive shifts imposed in QE to QT transitions...about which the market is silent... and apparently ignorant... (MOPE by omission). While, the Fed too seems to expect the accelerated shifts in QE to QT transitions will throttle inflation... and prove it transitory, with a delay... even if doing it as they are results in forcing an economic contraction and market failures in larger markets than nickel... However, the imposition of a liquidity squeeze... does NOT alter inflationary bias in REAL terms... even if the basis shrinks (which it is not)... if the commodities aren't made relatively more available versus demand rather than less in result ? And, you can't print them... so even if commodity prices contract under QT... they will contract LESS than the liquidity of the basis does... while the QE to QT shift in the short term imposes market disruption... in the mid to longer term... it strengthens inflationary impulses by countering prior velocity suppression... so when you relent on throttling liquidity... as must to avoid economic malaise becoming a deflationary spiral ex commodities... you get inflation on steroids.
As in other things... it becomes a timing issue... But, the Fed is backing themselves up from a corner... to an edge...
