While we have been told again and again that there are no asset bubbles – although th emost recent FOMC statement referenced concerns over small-cap mulitples and covenant-lite loan issuance – it seems the Fed’s Jeff Lacker just let slip some ugly truthfulness…Answering questions after a speech proclaiming growth ahead and rising inflation, he said:
- *LACKER RELUCTANT FOR FED TO ‘PRICK’ ASSET-PRICE BUBBLES
Well there it is. There are asset bubbles? But Lacker – who has been anti-QE to some extent – knows that if the Fed moves to actually do anything about it (other than jawbone), it’s all over. Perhaps as more realize the transition from a Bernanke Put to a Yellen Collar has occurred, there will be no need to jawbone any longer.
But jawbone on they will as open-mouth operations try to persuade investors that strong forward guidance is just as effective as printing 100s of billions of USDs….
- LACKER SAYS MARKET EXPECTATIONS THAT INTEREST RATES WILL REMAIN LOW MAY
BE BIGGER DRIVER OF MARKET LIQUIDITY, EQUITY PRICES THAN BOND BUYS
via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/hU1mzBOJBHw/story01.htm Tyler Durden