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Markets Face A Brutal "Margin Call" If Trump Loses Any More Credibility, Deutsche Warns
May 22, 2017

It took the Fed several long years to discover just how reflexive and circular the relationship it had established with the stock market had become. The Fed's Catch-22 was first observed back in September 2013, when as the Fed was still debating whether to taper or not caught in a vicious cycle where any hint it would ultimately end QE would be met with a prompt selloff, Deutsche Bank explained how it had found itself in such a reflexive mess:

Another theme arising from their decision to hold fire was their worry that financial conditions had tightened over the past few weeks. If this is the case then the path of tapering is going to be tough because every time the market thinks they are going to taper, yields will likely rise and conditions will tighten. However the Fed's guidance is becoming confused enough now that you couldn't rule out another change of emphasis, especially as the composition of the Fed will change notably over the next few months. So markets are underpinned by liquidity for now but it’s a fluid situation and it strikes me that the Fed do not have a clear direction at the moment which makes them difficult to second guess.

article continues; http://www.zerohedge.com/news/2017-05-21/stocks-face-brutal-margin-call-if-trump-loses-any-more-credibility-deutsche-warns