Professional trader Gregory Mannarino says the new Fed Head, Jerome Powell, caused the market to sell off last week, not Trump tariff talk. Powell blurted out in Congressional testimony that the “U.S. is not on a sustainable fiscal path.” Mannarino explains the truth bomb Chairman Powell dropped, “I think this guy was nervous. I think he’s getting shook up here. I think the weight of his position is weighing on him a little too much, and that is what sparked the sell-off. It wasn’t the tariffs. This was Powell, and the markets are saying that this guy really might not have our backs as much as Yellen did.”
So, is the Federal Reserve losing control of the markets? Mannarino contends, “It’s worse than that. They have already lost control. If they were in control, would they still be buying bonds like they are? Would they still be trying to ‘get it right’? They cannot unwind this in a normal way. They have created a system of bubbles, and they are well aware of this. These things tend to collapse very violently when they do. If the Federal Reserve or any of these central banks were in control, do you think we would be in the situation we are in right now? Absolutely not. All they have done is liquefy the world with debt and buy everything they can to keep this propped up. This is not control. This is some kind of a Frankenstein they have created by trying to prop everything up. . . . This is a corpse here that is on life support, and that is all it is. There is going to be a terrible moment of reckoning. Inflation, forget about it. Of course, there is going to be massive inflation. They can’t stop it. . . . They are in a lot of trouble here. Of course, they are going to lose control. Let’s say we start getting some real inflation and they start hiking and hiking rates super-fast. What’s that going to do? Bam, there goes your debt bubble, and then we’re done. Back to the Stone Age. Stock market 6,000 will probably seem like a dream come true because it might even go lower than that. . . . They are going to run this until they hit the wall. When is that going to be? I don’t know . . . . I think they are going to keep this propped up until at least the mid-term election. The stock market is going to continue to go up. The distortions are going to get worse and probably much worse until we get a correction to fair value.”
Greg is the producer and creator of USAWatchdog.com. The site’s slogan is “analyzing the news to give you a clear picture of what’s really going on.” The site will keep an eye on the government, your financial interests and cut through the media spin. USAWatchdog.com is neither Democrat nor Republican, Liberal or Conservative. Before creating and producing the site, Greg spent nearly 9 years as a network and investigative correspondent. He worked for ABC News and Good Morning America for nearly 6 years. Most recently, Greg worked for CNN for shows such as Paula Zahn Now, American Morning and various CNN business shows.