Rabo: If Powell Does Nothing, We Will See Godzilla-Sized Shockwaves Across Markets Everywhere

• Rabo: If Powell Does Nothing, We Will See Godzilla-Sized Shockwaves Across Markets Everywhere
  by Michael Every of Rabobank, via https://www.zerohedge.com/
  …. Meanwhile, it’s going to be a ‘monster’ week for central banks. Indeed, with the Fed, BOJ, and RBA all looking like the BOJ alone used to, the key focus is what Fed Chair Powell will say about the rise in long bond yields. Over the weekend, Treasury Secretary Yellen said that she wasn’t worried about inflation risks, which are “small”, and “manageable”: she again forgot she’s now in the wrong role in this particular movie. Treasury Secretaries are generally seen as small and manageable compared to central bank chiefs by global markets.
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  If Powell does nothing, we could perhaps be on the verge of a 2013-style Taper Tantrum. That would send Godzilla-sized shockwaves through markets everywhere, including Tokyo. (And I now think of 1970/80’s British TV ads where a Mock-zilla would eat famous global landmarks before deciding he preferred a certain candy “even chewier than a Barrow-in-Furness bus depot.”)   
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  Against that background, if the ECB switched to Esperanto to cry “Ne paniku! Ni havas ĉion sub kontrolo!”, it likely wouldn’t help that much. The same is true for the BOE in the Queen’s English, also meeting this week; and for the RBA; and of course emerging markets would be right at the front of the queue for impact. Even China would not be able to stand isolated from this development either, as we have seen before. So if when we stick to markets, sometimes it still comes back to Godzilla vs. King Kong…
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