Sinking into a ‘shadow world’

From Bloomberg:

U.S. stocks advanced, with the Dow Jones Industrial Average poised for a record close, as Federal Reserve officials said economic weakness warrants continued stimulus and investors await data this week on jobs and growth.

I argued yesterday that forward guidance has ‘lost power’, maybe because, as Benjamin Cole comments, “Sadomonetarist loudmouths on the FOMC have been undercutting forward guidance for years…the official Fed statements may speak less loudly than Richard Fisher’s latest effluent from his posterior aperture…”.

So we´ve fallen into a ‘shadow economics world’ where the expectations of continued weakness ‘favorably stimulates’ investors!

2 thoughts on “Sinking into a ‘shadow world’

  1. So we´ve fallen into a ‘shadow economics world’ where the expectations of continued weakness ‘favorably stimulates’ investors!

    Love this!
    It is paradoxical, but isn’t this more of a reason for FED to press forward, with QE (preferably tied to a target we love) ofc?

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