108 Months of Global Easing Ends: Tightening vs Recessions

108 months of global easing by the Fed, ECB, and Bank of England comes to a halt.

Global tightening is on the way. What can possibly go wrong?

I took an excellent chart from a Liz Ann Sonders Tweet and added recession dates.

Note that in 2001 it did not take much tightening before a recession started. Then like now, the Fed was positive everything was under control.

Bear in mind, tightening will not cause a recession. Central bank policies for the last eight years will cause the next recession. It should be a doozie for corporate profits and pension plans.

Mike "Mish" Shedlock

Comments (7)
No. 1-7
AWC
AWC

Tightening, topped off with more QE? The Fed is as Bi-polar as the weather. What's a Manic Depressive to do?

AWC
AWC

Other than buy shiny doorstops?

killben
killben

It took all central banksters acting together in concert to get to where we are today. Today Dudley was saying the Fed BS should be $3T. How are all of them going to stop QE and raise rates especially ECB and BoJ? Hopefully this time round people will see the central banksters for the monetary terrorists that they are and give them the rope and lamp post treatment that the lunatics richly deserve.

Blacklisted
Blacklisted

Govt indebtedness is MUCH higher now than during previous recessions, thanks in large part to rates being so low for so long. Since most of the debt is US-based, a rising dollar will amplify the debt problem of foreign entities, that already are feeling the pressure of rising rates, which will spike higher with insolvency risk, not increased demand.

Yes, rising rates now cannot help pensions after 10 yrs of ZIRP and managers that did not overweight equities. However, if you think that govt bonds are going to attract fear capital at these rates and govt confidence declining, you will be sadly disappointed. Gentleman now prefer blue chips, not bonds.

lol
lol
 global tightening lol,not only will central banks not tighten but the will break (shatter) all money printing records this year,with the fed (overtly) getting in the game,get ready for biblical levels of money printing,epic levels.Fed balance sheet will double (triple) before trump's term ends.