Jay Powell's in the hot seat for his lack of action on climate change. It might even cost him Fed Chair. Who had that on their Bingo Card? Welcome to 2021.
That's a lot to absorb tonight. But let me leave you with this. The stress tests should be done as part of a global framework of all countries. A stress test system must be able to value portfolios first before any price/rate/x expectations can be played with. Before that can be done forward markets and futures markets must be developed to a state of liquidity. One market pricing is working well then stress testing is analytically possible. Over time, not much, volatility data will accumulate. Then you're in business. Try to fund as much of what you want to do in the markets first then when necessary instruct the Fed to buy the rest that's not taken up. It's not perfect but it's better than what's being done now
How long does the Fed stay "boring" when it gets wrapped up in climate change politics? The influence might be more likely to run the other direction.
That's a lot to absorb tonight. But let me leave you with this. The stress tests should be done as part of a global framework of all countries. A stress test system must be able to value portfolios first before any price/rate/x expectations can be played with. Before that can be done forward markets and futures markets must be developed to a state of liquidity. One market pricing is working well then stress testing is analytically possible. Over time, not much, volatility data will accumulate. Then you're in business. Try to fund as much of what you want to do in the markets first then when necessary instruct the Fed to buy the rest that's not taken up. It's not perfect but it's better than what's being done now
Isn't maximum employment and a steadily increasing price level enough?