The Fed is a laggard, now discussing when and how to taper QE. The ECB is an even bigger laggard, as inflation begins to rage.
House prices in the largest markets have gone nuts amid “extrapolative expectations and speculative behavior,” as the Bank of Canada put it.
The Big Taper starts one central bank at a time. But you gotta keep the markets from swooning with a bit of welcome delusion.
Housing craziness is front and center.
“Makes you wonder if there’s a potential mid-QE-life crisis taking shape in Ottawa”: strategists at the National Bank of Canada in a note that would be hilarious if it weren’t so serious.
“Once crisis tools have served their purpose, central banks should scale them back.”
It’s odd to see it occur while almost every market reports record home sales.
But a surge in new renters pronto is unlikely.
“There’s a lot of extend, amend, and pretend with respect to finance documentation. But at some point the music will stop.”
“They’re whistling past the graveyard and offering no analysis.”