Not enough inflation. That's what the Fed is saying yet again. FOMC Statement "Inflation has continued to run below the Committee's 2 percent longer-run objective, partly reflecting earlier declines in…
Approximately 15 seconds after FOMC whispered its latest sweet nothings to the asset markets it is propping, I posted the statement at Biiwii. In it they conceded that the economy…
Release Date: June 15, 2016
Information received since the Federal Open Market Committee met in April indicates that the pace of improvement in the labor market has slowed while growth in economic activity appears to have picked up. Although the unemployment rate has declined, job gains have diminished. Growth in household spending has strengthened. Since the beginning of the year, the housing sector has continued to improve and the drag from net exports appears to have lessened, but business fixed investment has been soft. Inflation has continued to run below the Committee’s 2 percent longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation declined; most survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months.
This is pretty handy at the moment, I'd say. When there is "no inflation" (at least by gauges like this) that is the time that inflation can be promoted, eh?…
With reference to the previous posts about about weak economic data, the fundamentals for gold are getting a boost in this data. Durable Goods, Machine Tools and Consumer Confidence have all decelerated. The risk of the Fed being sensitive to inflation may have been reduced here in favor of not wanting to tank the markets.
A look at how a few markets are setting up pre-FOMC.
The charts are what they are, but we are dependent upon what the Fed may or may not put out there on Wednesday. I would put the odds of a rate hike at just this side of zero. But they are free to leave forward looking wording as is or do a little tweaking from the currently ultra dovish stance toward at least opening a discussion for rate hike expectations for June.
We talk a lot about FOMC stuff, inflation stuff and silver stuff. At 40 easy to read pages (w/ lots of graphical data backing up the themes) NFTRH 392, the…
The opening segment from this week’s edition of Notes From the Rabbit Hole has a little fun with the post-FOMC market situation. Unfortunately, there is all too much reality in this clowning around. From NFTRH 387:
Our main theme has been that the ironclad post-2011 confidence in the Federal Reserve among conventional market participants would slowly but surely start to fade because macro parlor tricks, so vigorously employed by the Bernanke Fed, were only tricks or in some cases (Operation Twist) borderline magic, after all.
At biiwii.com (still unsure if or in what capacity the site may reappear) we used to have fun with clown car videos, as the various Fed members piled out honking horns, doing somersaults and shouting incomprehensible phrases and announcements.
Like Rosco’s clown car above, that is all fading away now. The pretense that the Fed is the steward of a sound financial system and currency has been stripped away. We are no longer anticipating a waning of confidence. In rolling over last week and playing dead, the Fed announced for all the world to see that it is no more secure or respectable than the clown known as ‘the Draghi’, Kuroda the Klown or the troupes in Canada, Australia, England and China’s Central Planning.
The US Fed, through no good work of its own was the beneficiary of a Goldilocks environment in which global economic pressures resulted in capital flight into the US.
No time for a promo today. A good report, and a lot of editorial commenting to boot (incl. the coolest old clown car you'll ever see!). Subscribe to NFTRH Premium…
Not only was there not a policy surprise – you know, in the face of recent commodity strength and those embedded services costs throughout the economy – but the Fed did not even talk tough, which I thought they might do. Maybe Yellen will wobble and speak out of both sides of her mouth at the press conference.
Here is the USD ETF flopping on the non-event.
Time to whip through this text and then start hitting buttons! Or not.
Release Date: March 16, 2016
Information received since the Federal Open Market Committee met in January suggests that economic activity has been expanding at a moderate pace despite the global economic and financial developments of recent months. Household spending has been increasing at a moderate rate, and the housing sector has improved further; however, business fixed investment and net exports have been soft. A range of recent indicators, including strong job gains, points to additional strengthening of the labor market. Inflation picked up in recent months; however, it continued to run below the Committee’s 2 percent longer-run objective, partly reflecting declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months.
What They Said "In determining whether it will be appropriate to raise the target range at its next meeting, the Committee will assess progress–both realized and expected–toward its objectives of…
According to the amalgamation of 'Leading Indicators' to the economy, it is time for a rate hike. Here is the graph of LI and Fed Funds, from Wisdom Tree's post…
I don't take too much of what goes on during FOMC week seriously with respect to making actionable moves. While in market management I try very hard to keep whatever…