Deja Lu, All Over Again

Tyler Durden's picture

In what year was the following written:

The Federal Reserve appears on track to buy the entire [amount of] government debt it has committed to purchase, barring a sharp, unexpected shift in the economy's prospects.

 

If anything, lingering weakness and renewed concerns about global credit markets may lead top officials to lean toward doing more rather than less.

 

Policymakers would not likely have committed to a significant upfront figure if they saw the possibility that they would need to change course shortly thereafter. Instead, officials view the move much like traditional interest rate cuts, which are rarely taken back so rapidly.

 

A recent batch of better-than-expected economic data, including a relatively upbeat reading on the job market, has raised questions about whether the Fed acted prematurely in pulling the trigger...

 

The Treasury market has been selling off sharply, in part as a response to the somewhat brighter landscape.

The answer: 2010. The 10 Year back then was 3.40%.

But yes, baffle 'em with enough BS, and three years later everyone will forget that the "Taper" is nothing new, that it happens every year or so, and that without fail it is accompanied by a "sharp bond sell off" as a "response to the somewhat brighter landscape" only for central planning to go right back to doing the only thing it can do: buy everything without consideration for cost or market liquidity once the mirage fades all over again.

* * *

And a bonus, from the same Reuters article:

Whether the Fed's bond-buying policy, also known as quantitative easing or QE, will enter a third phase when the $600 billion in purchases is completed in June is another matter.

 

A hawkish tilt in the composition of voting members on the Federal Open Market Committee, where regional Fed bank presidents rotate in and out each year, will make consensus harder to come by in 2011.

 

The chorus of opposition to the policy, both internationally and domestically, could also restrain further Fed buying.

 

However, since the financial crisis sent the economy into its deepest recession, the Fed has shown a propensity for erring on the side of doing too much. Its influential chairman, Bernanke, has argued that Japan's fatal error was being too meek in its approach to unconventional easing.

Time to look forward toward not only the Untaper, but to QE5 (or is it 6? does anyone care as long as 'stocks' are up?), only this time with Janet Yellen hitting the print button.