We have been talking about how there had been no bubble in US stocks and how the economy is doing just fine. We have also been talking about how the bubble is in policy and that the economy and stock bull market have been created – yes, like Frankenstein’s monster once again – out of this policy bubble.
Enter economist Joseph LaVorgna of Deutche Bank… Fed needs to start raising rates, top forecaster says.
Will wonders never cease? As you may know, I read the financial MSM to get a feel for what the casual market participant is reading, what the majority is being told is the truth. Usually it is some combo of self-promoters and agenda (sometimes political) driven bulls and bears.
“The economy is improving much faster than the Fed is willing to acknowledge, LaVorgna said in an interview. At the current rate of hiring, more jobs will be created this year than in any year since 1999.”
Exactly, and still they inflate. He correctly puts the focus on the financial (and national) disgrace called ZIRP as opposed to the theater surrounding QE’s long term bond purchases.
“In six months, the unemployment rate will be below 6% and the core inflation rate will be at 2%,” he said. “We are way ahead of schedule. We’re going to get to 5.2% or 5.4% a year ahead of schedule.”
“The Fed is behind the proverbial curve,” he said. “The Fed should be raising rates.”
It’s all that this corner of the interwebs has been hammering on for over a year now. If the economy is at all real, get rid of QE and end ZIRP. Continue reading "ZIRP Gains More Attention"