“If it keeps on rainin’ levy’s gonna break…” – Led Zeppelin
This comes from Philly Fed President Charles Plosser, via Zerohedge.
I’ve tried to argue is look, if we believe that monetary policy is doing what we say it’s doing and depressing real interest rates and goosing the economy and we’re in some sense distorting what might be the normal market outcomes at some point, we’re going to have to stop doing it. At some point the pressure is going to be too great. The market forces are going to overwhelm us. We’re not going to be able to hold the line anymore. And then you get that rapid snapback in premiums as the market realizes that central banks can’t do this forever. And that’s going to cause volatility and disruption.
This is the tune from which the first quote comes. I think Bloomberg should use it on the “lead in” when they cover the next Fed meeting. It’ll set the right vibe.