Hedge Fund CIO: The Market Knows That The Fed’s Next Rescue Will Be The Biggest Ever

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Assessment: “We need to watch, and watch carefully, and see if the economy is evolving consistent with our expectations and adapt policy accordingly,” explained Powell, doing his best to play the highest stakes game of his career with the weakest hand of any central banker in living memory …

Millions of global traders and investors – intellectually and philosophically diverse, intensely focused, triangulating, weighing, placing bets sized according to their conviction, their precious capital at risk, with the most talented deploying the largest sums, exerting the greatest influence – produce humanity’s only true artificial intelligence. A superorganism, as magnificent as it is heartless, vicious to those who oppose its verdict: the wisdom of crowds.

“When He opened the third seal, I heard the third living creature say, “Come and see.” So I looked, and behold, a black horse, and he who sat on it had a pair of scales in his hand: Rev. 6:5

“We need to watch, and watch carefully, and see if the economy is evolving consistent with our expectations and adapt policy accordingly,” explained Powell, doing his best to play the highest stakes game of his career with the weakest hand of any central banker in living memory. You see, for decades, the mega macro-trends of expanding globalization, breathtaking technological advance and favorable demographics, combined to produce a global disinflationary environment.

This allowed central bankers to pursue increasingly aggressive monetary policies to moderate the economic cycle.

Now we find ourselves at a point where central bankers fear making a misstep that sparks a stock and bond market reversal which would force them to come to the rescue in even greater size.

The market knows this. And sizing up a tentative Fed, the market in its infinite wisdom taunted the Fed, pushing the S&P 500 to an all-time high. Bitcoin too. Read More @ Zero Hedge HERE