A top Federal Reserve official on Friday pushed back on persistent worries that the economy’s recovery from the pandemic-recession this year could be derailed by excessive fiscal stimulus from Washington or a sudden reversal of ever-rising asset prices.
New York Fed President John Williams, a close ally of Chairman Jerome Powell, said he thinks the economy is still “in a very deep hole” and has a long way to go to get back to full strength.
In that light, Williams said “I am not really concerned about stimulus or fiscal support right now or anything like that. Really what I want to see is an economy that gets back to full strength as soon as possible.” He spoke in an interview with CNBC. Some economists think the $1.9 trillion Biden fiscal package is too large and could cause the economy to overheat. The yield on 10-year Treasurys has been steadily moving higher this month, and there is some concern it might slow the economy by raising borrowing costs. Williams said rising yields on longer term Treasurys reflects greater optimism about the economy “so it’s not a concern.” A separate report, released earlier Friday from the Federal Reserve, said “asset valuation pressures have returned to or exceeded pre-pandemic levels in most markets, including in equity, corporate bond, and residential real estate markets” Asked for comment, Williams said the rise in asset prices has been driven by optimism about the economy and expectation in financial markets that long-run interest rates will stay low. “The fundamentals kind of tell you that prices should be somewhat higher,” he said. Nick Note: First off their is no inflation and their will be no inflation. And remember i told you over a year ago the FED would step on the yield curve. Like a balloon you squeeze one end the other end gets bigger. As you are seeing the short end is going lower and the higher end is rising. Soon we will begin our ZERO operations. Money has got to find a home. Its like a hooker looking for a dick. When she finds one it makes her money and it feels good and it has another benefit.. it stops her pimp from beating the shit out of her and she has got money for drugs… so even if the dick did not feel good at least she got high. The biggest pimp in the world is your broker…… The biggest whore is the stock market and the Dicks are the “inverters..”. who just like with the whore they are giving her money, getting fucked,,, and the disease they catch is the guaranteed wipe out.