Whalen Says Fed Thinks of Things in Silos

The discussion centers on the Federal Open Market Committee's (FOMC) limited policy options and the need to reduce portfolios before raising interest rates. Chris Whalen highlights the Fed's focus on households rather than financial markets, questioning the feasibility of rate hikes with large balance sheets. The conversation also touches on the European Central Bank and Bank of Japan's asset purchases. The impact of regulation rollback on banks and financial markets is debated, with concerns about liabilities repricing before assets, affecting earnings.

What are the implications of the FOMC's limited leeway in policy adjustments?

How does Chris Whalen perceive the relationship between the Fed's actions and financial markets?

What concerns are raised about the potential impact of raising interest rates on the yield curve?

In what ways might liabilities reprice before assets, and what could be the consequences for banks?

Discuss the changes in the allocation of financials over the past two years as mentioned in the text.