Federal Reserve Wants to Charge You for Pulling Your Money Out of Bond Funds

By Robert Wenzel

I have been pounding away in the EPJ Daily Alert that price inflation will be much greater than most expect as we move ahead. Thus, today's strong CPI number is not a surprise. I also expect interest rates to skyrocket and have been warning ALERT subscribers to get out of the bond market.

A new reason has just emerged to get out of bond funds fast. 

The Financial Times is reporting that:

Federal Reserve officials have discussed whether regulators should impose exit fees on bond funds to avert a potential run by investors, underlining concern about the vulnerability of the $10tn corporate bond market.

Officials are concerned that bond funds are becoming “shadow banks”, because investors can withdraw their money on demand, even though the assets held by the funds can be hard to sell in a crisis. The Fed discussions have taken place at a senior level but have not yet developed into formal policy, according to people familiar with the matter...Exit fees would seek to discourage retail investors from withdrawing funds, thereby making their claims less liquid and making a fire sale of the assets more unlikely.

Got that? The Fed destroys the economy with their money printing policies (SEE: The Fed Flunks) and now that want to charge you a fee to get out of harms way.

Get out of bond funds, now! Consider yourself warned.

Robert Wenzel is Editor & Publisher of EconomicPolicyJournal.com and author of The Fed Flunks: My Speech at the New York Federal Reserve Bank.