Watching The Fed: Yield Curves, Wall Street And Food Shortages

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In this episode of the “Fed Watch” podcast, I cover topics we were unable to cover on the weekly livestream. I go over the importance of the Sarah Bloom Raskin-withdrawal, what the Fed is thinking by signaling hawkish policy so aggressively and do a deep dive into the emerging food crisis that could result in a continental-scale famine.

credibly promise to be irresponsible;” go big or go home. The Fed is now attempting to be irresponsible in the opposite direction.

The Fed will come right out and say that their policy works through inflation expectations. Typically, they talk about how much quantitative easing they will do, in an attempt to raise expectations of inflation, which makes people act as if inflation were higher, manifesting that inflation in the future. Right now, it seems as if they are trying the reverse.

Ask yourself, how would the Fed lower inflation expectations? They have to act hawkishly, and talk about raising interest rates and quantitative tightening. That is what we are seeing now. Everyone sees the yield curve inversions happening. They know the world is sliding into war and deglobalization, two things that make people expect higher prices in the future. They have to attack those stubborn inflation expectations with very hawkish rhetoric in order to tame expectations back to “normal.”

“War in Ukraine sparks concerns over worldwide food shortages” from France 24. In it, they point to the wheat shortage from the war in Ukraine that is already causing food shortages in North Africa.

The article states, “The UN Food and Agriculture Organization (FAO) estimates that an additional 8-13 million people worldwide face undernourishment if food exports from Ukraine and Russia are stopped permanently.”

The article is good at summarizing one aspect of the looming food crisis: a shortage of wheat. What they do not even mention is the shortage of fertilizer. Both of these things together threaten a continental-scale famine where that number of eight to 13 million new people facing hunger is probably 10 times that.

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