The ECB and the BoJ are out of the way and generally speaking, most observers think risk assets probably have the all-clear from now until September barring some kind of meltdown at 1600 Pennsylvania Avenue which, honestly, seems just as likely as not – especially after what we learned this morning.

One thing that would cause an immediate rebellion from traders the world over would be a surprise from the Fed next week, something exactly no one thinks will happen and something that, to be sure, has exactly 0% chance of occurring.

But that’s not going to stop former FX trader Richard Breslow from speculating about it because apparently, he’s run out of fresh ideas for the week.

Despite being completely unrealistic, what you’ll read below does reinforce a couple of important points and also raises what is perhaps the most important question of all for central banks. Namely this: if it’s clear that what you’re doing isn’t working in terms of creating the type of “real economy” inflation you’re ostensibly aiming to create, then hasn’t this entire endeavor become one giant example of Einsteinian insanity?…

Via Bloomberg

It feels strange but, curiously, not entirely pointless, to suggest the Fed do something that there’s zero chance they will even contemplate. I’m talking about next week’s FOMC meeting and using it as an opportunity to be bold. This is mostly a meeting they hold in mid-summer to justify the fact that no one has any desire to be in Washington DC in August, and September is a long way off. But taking an extended holiday is precisely what they oughtn’t do. The only thing it will accomplish is forcing, as well as encouraging, investors to carry on with the types of trades every right-minded observer thinks has a large element of recklessness. Which is just a somewhat less nice word for “financial conditions remain benign.”