Richmond Fed president Lacker warns that the dramatic rise in Fed lending pushes past its supervisory reach and risks destabilizing the system. The recently installed financial safety net must be rolled back once markets stabilize, he says.
Markets are very skittish this afternoon with equities down 3% and important support levels just below 7900 in the Dow quickly coming back into view. Bonds are in heavy demand and the dollar and Yen have resumed their climb, trading at session highs.
EUR/USD is now at 1.2655 and USD/JPY at 96.30.
