Brave New Strange World of "Normalcy"

My how strange it's been when "normalcy" is considered a "brave new world".

Please consider Fed Entering Brave New Policy World as Rates Near Normal Levels.

As the Federal Reserve approaches the final stages of monetary policy normalization 10 years after it cut interest rates to zero, it faces the tough task of charting a less certain path while taking incoming fire from President Donald Trump.

“Policy making is easy when you are obviously far away from’’ neutral, said Vincent Reinhart, chief economist at Standish, part of BNY Mellon Investment Management. “It’s much harder when you get into a region where there is a range of disagreement over what neutral is.’’

Policy Making is Easy?!

Reinhart is clearly wrong or it wouldn't have take 10 years just to get to the strange world of normal.

Long Strange Tip

Lately It Occurs to Me

Lately it occurs to me

What a long strange trip it's been.

After 10 years we are close to normal. Don't expect that to last.

Mike "Mish" Shedlock

Comments (8)
No. 1-6
2banana
2banana

Amazing - isn't it.

Cheap and easy money, bailout after bailout, ZIRP (zero interest rates), not one banker in jail, QE to infinity, HARP, HAMP, the trillion dollar stimulus, cash for clunkers, doubling the national debt are now considered NORMAL and what the US Government should be doing...

And it will end in disaster.

History is full of "experiments" of cheap and easy money and debasing the currency.

Magik Moumou
Magik Moumou

Glad to see you're a deadhead !!! In fact QE looks to me like a bus that never ever land (The other one).....

Bam_Man
Bam_Man

"Normal" is now where we used to be during times of economic/financial stress (1992-93).

thimk
thimk

the markets are apoplectic with small rate increases and a neutral rate of around 3 percent . tell me that's normal. musical tribute is worthy. replace "love" with "debt" in the lyrics. we're addicted to debt.

RonJ
RonJ

In a cycle, a constant normal doesn't exist. Cycles move to extremes of peaks and troughs. What works in one phase of a cycle, doesn't work in another phase of the cycle.