As ECB Tapers, Fed’s Bostic Gets Cold Feet Amid Delta Doubts

As ECB Tapers, Fed’s Bostic Gets Cold Feet Amid Delta Doubts

On the 27th of August (2021), Bostic said that the “economy’s strength calls for The Fed to reduce support,” implicitly backing a taper to the immense flood of liquidity that is floating every zombified boat in the world. The Atlanta Fed head added that it was “reasonable” to trim bond-buying in October.

Fast forward two weeks and things appear to have changed.

On the same day as The ECB announces the start of tapering (but don’t call it that) their bond purchase scheme, Reuters reports that Fed voting member Bostic is pushing back on the start date of The Fed’s taper amid dismal data, potentially driven by the Biden admin’s fearmongering over the Delta variant.

“As strong as the data was coming in the early part of the summer, I was really very much leaning into advocating for an earlier start than what many may have expected” on the bond buying taper, Bostic told WSJ in an interview published on Thursday.

The weaker data that we’ve seen more recently suggests to me that maybe there’s a chance for some play on this, but I still think that sometime this year is going to be appropriate (to slow the asset buying).”

There’s just one thing Raphael – what changed in the last two weeks? Because the divergent paths between reality and markets – enabled by your liquidity-gasm – has only grown wider…

Given the trend is crumbling economic data has been going on for months, why the sudden cold feet from Bostic? Was The Fed ever actually going to taper?

Tyler Durden
Thu, 09/09/2021 – 08:25

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