$1.1 Trillion Fund Is Buying Everything With Fed At “Market’s Mercy”

“Earlier this month, when the Fed released the full transcripts from its 2013 FOMC meetings, there was one particular moment of epiphany by now-Chair Jerome Powell, when he unveiled what the markets have known all along: that the Fed is hostage to the market’s every whim, to wit:

I have one final point, which is to ask, what is the plan if the economy does not cooperate? We are at $4 trillion in expectation now. That is where the balance sheet stops in expectation now.  If we have two bad employment reports, the markets are going to move that number way out. We’re headed for $5 trillion, as others have mentioned.  And the idea that President Kocherlakota said and Governor Duke echoed— that we ’re now a captive of the market — is somewhat chilling to me.”