SideNote: I still think, that the Feds will do another round of QE, stock market window dressing for the Novemember Presidential election. I read an article at the beginning of the year, that made sense, the Feds knew they needed to allow the stock market to have a meaningful correction, hence the reason for the Feds raising interest rates. From what I understand, the banks would suffer more harm with negative interest rates as oppossed to inflating their debt away, through more money printing. If they chose negative rates, the Government probable would have a civil war on their hands during the U.S. presidential election!! So I think the Feds will go with more Helicopter money, less pain for every one in the short run. Time will tell. GRIM

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Bullard Admits It's "Unwise" To Continue Rate Hikes, Says "If Needed" Will Do More QE

BULLARD SAYS FED HAD GOOD REASONS TO HIKE IN DECEMBER AND DOES NOT CONSIDER THE MOVE A MISTAKE

The ironies continues: Bullard, who for much of last year argued for an earlier rate hike, said he now feels key assumptions supporting higher rates have been undermined.

Inflation expectations have fallen "too far for comfort," making it more probable inflation itself will fall and continue to miss the Fed's 2 percent target, Bullard said in remarks prepared for delivery to a gathering of financial analysts.

"I regard it as unwise to continue a normalization strategy in an environment of declining market-based inflation expectations," Bullard said. In addition, declining equity prices and other tightened financial conditions have made dangerous asset bubbles "less of a concern over the medium term."

As a result, it would be "unwise" for the Fed to continue hiking interest rates given declining inflation expectations and recent equity market volatility.

And just like that, Bullard admits that just like all throughout the 2009-2015 period, the Fed remains hostage to the market's every whim.

Then there was the topic of bubbles, which was mentioned on at least 8 separate occasions in his presentation. His point here was simple: at 2100, the S&P is too high and so the Fed was justified to hike; at 1900 the S&P is too low and the bubbles have popped. It appears that for the Fed, the Fed balance sheet implied fair value of 2,000 for the S&P is the perfect sweet spot of "fair value".

BULLARD: PLENTY OF CAPACITY TO EASE IF NEED TO