CNBC had Bill on to translate what had happened at the Fed meeting — relying upon his deep reservoir of experience in the credit markets.
Gross viewed Yellen’s comments as ‘dovish’ — because they only mentioned to more hikes for 2017 and another 2 in 2018. He chalked it up to Janet being a natural dove, big lover of easy monetary policy.
In Bill’s big bug eyes, fiscal reform and potential tax policy adjustments are secondary factors to the actions of the BOJ and ECB — who he thinks are buying the stuffing out of US treasuries in their ridiculous QE programs.
What’s most important to Bill is the potential cessation of QE — which would then usher in a new era for credit markets — one that will be rued for all eternity, bringing forth with it ‘hell’, alluding to potential majorly drops in bond prices.
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QE can’t end, whoever tries to end it first gets to eat the biggest shit sandwich and they all know it. Why stop QE when you can just keep printing money and buying foreign stocks & bonds with it, and those same foreign countries can do the same thing? There are only two ways this can go, either some or all of the QE nations stop and make holders of their bonds huge bag holders, or they keep printing money and keep the circlejerk going.
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the potential cessation of QE ( draghi mentioned rolling back QE while raising rates seems like he is following script)…… without the FED artificially holding bond prices high and yileds low…the pension crisis begins in earnest. You might call this next phase in the bond market the Great Unwinding
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He who sells his bonds first and protects his capital wins. Who is going to blink first.