Andrea Oh, Donald Trump, Cnbc discussed on The Financial Quarterback
We. Got Al. Go ahead Andrea Oh, hi everybody's talking about the, fed increasing interest rates very, quickly which is is not good but nobody is talking about the fact that the head, is also reducing their. Balance sheet shrinking their. Balance sheet. There Very saying all of that liquidity they, had pumped into the. System From the period right after the financial crisis up until about three, or four years ago when they Had the huge asset purchase program in place And what they're doing now is air reversing all that to the tune of forty trillion dollars or so Forty trillion dollars a month They're pulling all of that liquidity out of the banking system and they've been doing this now and they're actually going to increase the pace of that At the end of the year How all of this money is being pulled out of the banking system. And liquidity that has been feeding the stock market is going away Yeah and that could be a recipe for disaster and I actually think it's necessary but at what, pace right if we didn't have The. Trump bump and the positive effect of the Trump Konami we wouldn't have been able. To do any of. This, so that's a positive but? The, negative is very few have been. Successful. In navigating these conditions as so that's a. Great point Andrea any other comments, on that well these, conditions, never existed before today I. Know that's a good. Point you're right we've never had this amount of juice in the system and then. We have another big. Danger, is the inverted yield curve? I, mean if if you've studied that There's an article by on. CNBC another not politically neutral here. But you. Know they try to be fair July twentieth two thousand, eighteen this was yesterday the biggest risk in the bond market isn't. Rising rates, or the fed verse Trump It's the, inverted yield curve and, that's the difference, between the two year treasury bond. Yield and the ten. Year the last. Seven out of seven times the yield curve went negative since the sixties recession followed So the show. Has nothing to do I find this interesting you know people if if this does. Go bad this economy you know those all Trump will you know things are cycle cyclical too BA, banks can't make the loans that a healthy economy needs. To function when the short, term rates, at which they borrow? Go higher than the long term rates, at which they, are repaid, so this this is the danger folks in this raising of, rates so, I. Would say, maybe I mean who am I right I help you with your. Income plans your retirement plans risk management tax, reduction strategies for those of you want that call eight, nine hundred.