With the U.S. economy weakening, this should get very interesting with the Fed balance sheet still at emergency levels.

May 11 (King World News) – Here is what Peter Boockvar wrote today as the world awaits the next round of monetary madness:  In case you missed his comments yesterday Boston Fed President Eric Rosengren, a non voting member, has really done a 180.

I always considered him a card carrying bleeding heart dove and now he is one of the most hawkish members of the Fed. It’s the reverse of ex member Narayana Kocherlakota who went the exact opposite route and embraced zero rates and was jealous of the Europeans who went negative…

Fed Balance Sheet Still At Emergency Levels
Rosengren yesterday said he wants to hike rates three more times this year and start tapering after the June meeting. He fears the economy is overheating which is ironic after a. 7% Q1 GDP print but his point is more on the labor side as he realizes the hole they are now in with the labor market continuing to tighten, the unemployment rate continuing to fall and the Fed is sitting there with its benchmark rate of just. 875% at the same time their balance sheet is still at emergency levels.

Also highlighting the tug of war I’ve talked about all year between hoped for fiscal reform and its tailwind vs the headwind of monetary tightening, Rosengren said the more fiscal stimulus we see, the more monetary tightening we will get as well…….more here