David Haggith writes
The Fed’s plane called Recovery is disintegrating slowly, rather than in one huge blow-up. Six months out from lift off, it is clear that the forces against another rate increase are growing worse month by month.
The Fed’s chances of pulling up any higher are getting rapidly smaller. Globally, there is talk of Brexit and Grexit, and China is looking like a mountainside that could slide any day now. Japan’s one-hundredth attempt at economic recovery through quantitative easing has failed completely. Much of the world had descended into Alice’s Wonderland of negative interest rates for the first time in world history, as a last-ditch attempt to recover from the Great Recession (and to recover from their central banks’ failed recovery attempts). Two major European banks are failing, and Venezuela and Brazil have collapsed into economic chaos. (And those are just a few current headlines.)
Yet, the worst news for the Fed is right at home. The Fed’s plane never made it more than a few feet above the runway, when this week the illusory jobs recovery flew like a goose into the Fed’s left engine just as Captain Yellen was hoping to pull back on the stick for one more attempt to gain some interest altitude….