Erik Norland and Harley Bassman on Fed Policy, Volatility, MMT and Inflation

Published on
December 22nd, 2020
Duration
56 minutes

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Erik Norland and Harley Bassman on Fed Policy, Volatility, MMT and Inflation

Live ·
Featuring Erik Norland and Harley Bassman

Published on: December 22nd, 2020 • Duration: 56 minutes

Erik Norland, executive director and senior economist at CME Group, joins Wall Street veteran Harley Bassman of The Convexity Maven to discuss the impact of Fed policy on volatility across a handful of assets since the pandemic and, more broadly, since the GFC. In addition to this discussion of potential unintended effects of Fed policy, they examine its failure to generate meaningful inflation in anything aside from financial assets. They also debate whether negative rates in the US are probable—or even possible—as well as why the dwindling monetary policy toolbox combined with political rhetoric seems to point towards MMT and a passing of the baton from monetary authorities to fiscal authorities at least as it relates to generating inflation. Filmed on December 16, 2020. Key Learnings: The Fed’s monetary policy has had measurable effects on markets, especially in terms of reducing volatility but has not been successful in generating inflation. The shift from monetary to fiscal policy could be what finally ushers in the period of inflation many have been predicting.

Comments

Transcript

  • SS
    Shanthi S.
    23 December 2020 @ 11:30
    The automatic page load to the next video is incredibly annoying and a disincentive to read comments, like or engage. This was a great conversation. Thank you both very much. Could have been longer/deeper, and would have liked to hear a bit more from Harley too.
    • PW
      Pratik W.
      26 December 2020 @ 19:34
      I have requested to RV to give us an option to turn off this auto play feature as well. I am sure they are reading our comments and working on it. I have seen so many positive changes in the platform based on our past feedback. Let's keep pushing for this one as well!
    • RC
      Romesh C.
      2 January 2021 @ 09:57
      Agree, great idea
  • JM
    John M.
    22 December 2020 @ 18:16
    If we were to have inflation at 3-4% (or higher) would this not exacerbate wealth disparity since large segments of the working class would be unable to secure adequate wage increases?
    • PB
      Peter B.
      1 January 2021 @ 05:39
      In the past (see Weimar Germany) the working classes were able to more effectively strike and obtain wage increases linked to CPI increases. Whether this would hold true today remains to be seen, given the reduced power of collective bargaining. Optically, I think you also have to keep in mind that it’s more difficult for a member of the managerial class who is already materially comfortable to advocate for higher wages than it is for someone on the brink of starvation due to reduced purchasing power.
  • JS
    Jon S.
    26 December 2020 @ 16:27
    WoW - Bring Erik Norland back! Humble, clear, nimble, questioning so many things. This is the best ever interview for me. This is just my opinion.
  • DS
    David S.
    26 December 2020 @ 07:34
    Excellent presentation. I need to listen again to better understand. Hopefully we will see more of both gentlemen on RV soon. DLS
  • MS
    Marius S.
    23 December 2020 @ 11:46
    Thanks to both gentlemen for a very informative, no-nonsense discussion.
  • BR
    Brian R.
    22 December 2020 @ 22:01
    Hi there, just wondering if Erik and Harley have any opinion on Yellen's nomination with regard to 1. potential size of Fiscal and potential for Fed monetization and 2. Yellen's mention of strong $ policy, many thanks Brian