This is so stupid it’s special. Because we’ve massively increased our part-time jobs, the fed may end their printing sooner, rather than later.
The beginning of the end of the Federal Reserve’s massive bond-buying program might come sooner than many investors think if recent gains in the U.S. labor market do not prove fleeting…..
The marked improvement in the labor market since the U.S. central bank began its third round of quantitative easing, or QE3, has added an edge to calls by some policy hawks to dial down the stimulus. ……
“We could reduce somewhat the pace of our securities purchases, perhaps as early as this summer,” San Francisco Federal Reserve Bank President John Williams said on Thursday, adding that his view is that summer begins in mid-June.
The Fed’s balance sheet has swelled to some $3.3 trillion and officials have been debating whether this risks igniting future inflation or blowing up asset bubbles, even as they seek to help a tepid economic recovery.
Well, maybe not…….
Most economists do not expect a tapering of bond buying until later in the year, in part because of weak readings on inflation.
But the factory sector looks headed for a third straight monthly decline and most forecasters expect the economy to expand at only about a 2 percent annual rate in the second quarter. Growth of more than 2.5 percent over several quarters is generally needed to lower the still high jobless rate.
Inflation has also slowed, which is a key reason most Wall Street economists are betting the central bank stays the course for a few more months. Consumer prices rose just 1.1 percent in the year through April, well below the Fed’s 2 percent goal.
You see, the Fed thinks that more part-time jobs means that our job situation is easing. So maybe we can quit debasing our currency soon. OTOH, our inflation rate isn’t high enough. Apparently they prefer an inflation rate much closer to our GDP growth. Afraid someone will gain value, I suppose.
The last jobs report showed more part-time job gains than the total job gains. We actually lost on total full-time jobs. But, the Feds think that’s a good thing. Which makes total sense if you think our inflation rate should equal the GDP growth.
Yes Ben, it makes my head hurt, too.
You can read more here.
suyts space 
My current theory:
The real purpose of QE was to recapitalize the US and European banking system. This has been accomplished. I think QE will stop in July. Bernanke has already mentioned that a scheduling conflict will prevent him from participating in the Jackson Hole meeting of the Feds in August. He didn’t say what kind of important activity will occupy him. My guess is, coping with the aftermath of the end of QE, which will be a crash. That crash will be blown out of proportion by the media to get a crisis that enables you to do things you couldn’t have done before; probably the introduction of a new currency system; maybe another Bretton Woods based on IMF special drawing rights.
The banks are probably in on the plan; they will try to use the remaining time to sell the stocks they have bought with QE money to the next greater fool i.e. the public. We will see another 2 months of intensive stock market bonanza propaganda.
Well, if you were a large bank, who wouldn’t like the Fed buying your trash notes? You thought has some good reasoning to it.
Whenever it occurs, the market is going to see a bear.
But it will see a bear even if the Feds do not stop it. The law of diminishing returns.
Yes. But as this will come anyway, why not control the exact timing when you are the manipulator. And that’s why it WILL be a scheduled event.
The question then becomes – what do they want to prove. They will schedule it to coincide with their next lie.
Of course the banks will be in on it. One way or another. With a gun to their heads.
Reblogged this on Climate Ponderings.