Faber News Flow

The Fed tipped its hand today, and unveiled its " viral reaction function"  revealing the timetable according to which the Fed will start talking about QE tapering. As discussed previously, James Bullard, president of the St. Louis Federal Reserve, said in an interview with Bloomberg Television that getting 75% of Americans vaccinated would be a signal that the pandemic was ending, which is a necessary condition for the central bank to consider tapering its bond-buying program. According to our calculations, extrapolating current vaccination rates would mean that - all else equal - we could see the Fed's 75% bogey be hit in just two short months. As we further said, one thing Powell did not want to do is give any calendar estimation as to when the Fed could start "thinking about thinking" about tapering. Well, thanks to Bullard, it may have no choice but to do so as soon as the summer. And what's worse, now that the market is

Last Tuesday we reported that China Credit Impulse Is Set To Collapse As Beijing Orders Banks To Curtail Loan Growth For Rest Of 2021, and just a few days later we got the latest confirmation of this critical - for the global economy - transition. Overnight, China reported that the sequential growth of total social financing (TSF) moderated in March following a strong rebound in January and February, with robust loan growth offset by a contraction in shadow lending. Reflecting the normalization in monetary policy in past months, and the PBOC's most recent attempt to rein in runaway debt, Goldman believes that credit growth should moderate this year but remain broadly in line with nominal GDP growth. This would be primarily driven by moderation in government bond and corporate bond issuance, and slower loan growth. On the other hand, a big test to China's commitment to contain debt will emerge in the coming months, when issuance in local governmen