If the Fed is reluctant to tinker with its principal policy instrument, then it should give active consideration to secondary instruments that it has at its disposal. These include increasing margin requirements on equity lending, raising reserve requirements on real estate lending, and figuring out a way to challenge the “carry trades” that are currently taking fixed income markets to excess.
He didn't do these things when many people were asking him to do them, and when the world has a much rosier hue, so Roach thinks AG is going to do them when employment is still punk and any downturn here will plausibly lead to more trade strictures? Get real.
Not that what he says doesn't make total sense, IMHO. I agree completely, so let me add my thanks for continuing to post his ruminations.
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