“Jefferies’ economist David Zervos is back in a new note, which takes stock of developments at the Fed and the Bank of Japan.
The Fed, of course, recently adopted Evans Rule, which indicates that tightening won’t occur until unemployment gets to around 6.5%, or inflation expectations are around 2.5%. The Bank of Japan is expected to see a new round of aggressive policy, thanks to the wishes of incoming Prime Minister Shinzo Abe.
While markets seem to be pretty happy about it all (ESPECIALLY in Japan) Zervos thinks it will end in uncontrollable inflation, like in other past Keynes-inspired experiments.
In his note, he recounts his time at The Fed:”
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