In this week’s market commentary, John Hussman illustrated the relationship between T-Bill yield, monetary base per unit of GDP, and change in monetary base per unit of GDP that occurred between 6-month periods.
His point as he repeated this week is that in order to achieve even a slightendogenousincrease in interest rates, the Fed will have to reduce the monetary base sharply. Alternatively, in order to offset the inflationary pressure from a slight exogenousincrease in interest rates, the Fed would be forced to respond with a sharp tightening in its balance sheet.
Read the full text here.
His point as he repeated this week is that in order to achieve even a slightendogenousincrease in interest rates, the Fed will have to reduce the monetary base sharply. Alternatively, in order to offset the inflationary pressure from a slight exogenousincrease in interest rates, the Fed would be forced to respond with a sharp tightening in its balance sheet.
Read the full text here.
