ML-Implode News - Fed is Careening Into Housing and Stock Bubble... Look Out Below!

What hasÂ happened (and apologies for the ten dollar words) isÂ that the Fed'sÂ reaction functionÂ has flipped 180 degrees since the Trump election.Â Today the Fed is looking for excuses to tighten monetary policy, not excuses to weaken. So long as the unemployment rate is on the cusp of "instability", that's the only thing that really matters to the Fed (for reasons discussed below). Every other data point, including a market sell-off or a flat yield curve or a bad CPI number -- data points that used to be front and center in Fed thinking -- is now in the backseat.
I'm not the only one saying this about the Fed's reaction function. Far more influential Missionaries than me, people like Jeff Gundlach and Mohamed El-Erian, are saying the same thing. If you think that this Fed still has your back, Mr. Investor, the way they had your back in 2009 and 2010 and 2011 and 2012 and 2013 and 2014 and 2015 and 2016 ... well, I think you are mistaken.Â I think Janet Yellen broke up with you this week.

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Fed is Careening Into Housing and Stock Bubble... Look Out Below! - Ben Hunt