The Fed’s Deflation Dilemma
Never give a box of matches to an arsonist.
by Editorial Staff
Updated: November 11, 2021
The Federal Reserve released its semi-annual Financial Stability Report this week and it made for hilarious reading. The headline quote was:
"Asset prices remain vulnerable to significant declines should investor risk sentiment deteriorate."
The U.S. central bank identified a list of factors it is worried about. The Chinese real estate sector, emerging market sovereign and corporate debt, the U.S. housing market, crypto stable-coins and meme stocks. The wonks at the Eccles Building in D.C. are concerned that a tightening in financial conditions could cause some or all these factors to threaten the stability of the system...
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