The man in charge of the Federal Reserve’s infamous “operation Twist” has just announced that he is quitting. At age 41, hardly anyone quits the FED.
He is at the New York FED, the privately owned branch that is in charge of executing Federal Reserve policy, His name is Brian Sack.
He is the head of the markets group at the NY FED.
He has overseen Operation Twist, whereby the FED buys long-term U.S. government bonds to force down long-term interest rates. This is a subsidy to the mortgage market.
Operation Twist is set to expire on the day Sack retires: January 29.
Will the FED begin a new round of monetary inflation? Or will the FED unwind these positions by selling these bonds?
I think the answers are yes and no. Yes, tyhe FED will inflate. No, it will not unwind.
“I’m dumbfounded,” said Raymond Stone, co-founder of Stone & McCarthy Research Associates, which closely tracks Fed policy. “He laid the groundwork for a lot of things the Fed has done and communicated clearly to the market. He did an excellent job in a difficult environment.”
The FED runs bailouts. Yet this FED official is bailing out.
What does he think is coming?