Kansas City Fed's Hoenig Threatened By Threats to the Fed
Holy shit, Satan must have ice-skated to work this morning, a Fed official actually acknowledged the political pressure the Fed is under to perform, or rather maintain the good greasing up it's been giving the economy since 2008. Whatever it takes, Hoenig, don't you forget that. How can you? Your own fearless leader is the one who said it.
Growing mountains of U.S. government debt will increase pressure on Federal Reserve to hold interest rates low, making it harder to avoid inflation, a senior Fed official said on Tuesday.
"The current outlook for fiscal policy poses a threat to the Federal Reserve's ability to achieve its dual objectives of price stability and maximum sustainable long-term growth, and therefore is a threat to its independence as well," Kansas City Federal Reserve Bank President Thomas Hoenig told the Peterson-Pew Commission on Budget Reform.
Hoenig, a voter this year on the Fed's interest-rate setting committee, also urged the U.S. central bank sell some of the assets it has acquired to help counter the worst economic downturn since the 1930s.
Holding them for an extended period will invite pressure from politicians to use Fed powers to aid other ailing sectors of the economy, he said.
Hahahahahahahahahahahahahahaha joke's on you, homie, there's no getting out of it now. Too late, you fed the alley cat at the back door with your MBSs and T-bills and "temporary" liquidity programs and now look, you've got a mob of pissed off bastard kittens scratching up your door looking for the milk. Idiots. Now duck, this might get messy.
I hate to do this to Mr Hoenig but someone's got to - he does realize the laughable concept of Fed independence went flying out the window long ago, right? From the moment "whatever it takes" slipped off Bernanke's tongue, the Fed has been little more than glorified whore of debt to feed the whims of the Treasury (handmaiden? bwhahaha they wish). And what, that's going to change with a few choice words at some stupid speech?
Nice try but it's not happening. Now comes the point when they start throwing punches at FOMC over who has to spread their asscheeks the widest to take the next round from the Treasury.
I can't believe they just gave it up like that. So so sad.