Two Fronts, Zero Wins: The Failure Of US Interventions

Over the last few decades, investors got used to believing that both the US government and the Fed can solve every issue. As a result, the stock market pessimism typically lasts for a very short period, resulting in strong V-shaped recoveries. Two Fronts, Zero Wins: The Failure Of US Interventions Summary - Recent US-Japan interventions to support the yen and US Treasury debt buybacks have proven ineffective, reflecting limits to government and central bank power. - The yen's credibility crisis stems from decades of ultra-expansionary policy, persistent low rates, and Japan's unwillingness to tighten fiscal or monetary policy. - The US Treasury's $4 billion debt buybacks are negligible versus a $40 trillion debt load; bond markets seek fiscal discipline, not symbolic gestures. - Rising US long-term yields reflect skepticism about policy effectiveness, with 30Y yields at their highest since 2007 and no sign of fiscal restraint. This article was written by Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.