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More Conflicting Disinformation: Fed's Fisher Says May Vote To End QE2 Before June, As Lockhart Says QE3 May Be Needed

Tyler Durden's picture




 

More purposeful confusion out of the Fed this morning after Fed's Fisher just hit the tape saying he may vote to end QE2 before the June deadline, even as Lockhart says QE3 is possible if the US faces another downturn. The purpose of all this constant conflicting disinformation is to keep market participants on edge as the marginal economic improvement is finally starting to reverse as Goldman's Jan Hatzius insinuated last night. In other words, should the Libyan conflict not be resolved for another few weeks, QE3 is pretty much guaranteed.

From Reuters:

Uprisings in the Middle East and North Africa have increased U.S. economic uncertainty, and Federal Reserve policy-makers should not rule out further bond purchases if things worsen, a top central bank official said on Monday.

"My first inclination is to be very cautious about extending asset purchases after June," Atlanta Federal Reserve Bank President Dennis Lockhart told a conference sponsored by the National Association for Business Economics.

"Given the emergence of new risks, however, I prefer a posture of flexibility as regards policy options," he said.

This includes a need for policy-makers to remain vigilant against the prospect that recent spikes in commodity and energy prices, which are making businesses and consumers nervous, do not give rise to an inflationary psychology, Lockhart said.

And the highlights from Lockhart's speech delivered to the NABE Policy Conference:

Lockhart thinks that the economy is demonstrating moderate strength  and the pace of growth is accelerating somewhat. He expects a sustained pace of growth in the range of 3 to 4 percent, inflation firming to a trend rate around 2 percent, and gradual employment growth in the next one to two years.

In Lockhart's view, the balance of risks has shifted with the unrest in the Middle East and Africa. His base case forecast sees continuing improvement, but with concern about growth downsides and price upsides. Given the emergence of new risks, Lockhart prefers a posture of flexibility regarding policy options.

Lockhart thinks about the desirability of another round of large-scale asset purchases and an exit to a less accommodative policy stance within a framework that emphasizes forward-looking rules that depend on forecasts. First and foremost, he will be looking for signs of emerging price pressures. He will continue to monitor various inflation indicators, including median and trimmed-mean measures of core inflation, measures of inflation expectations, and a "sticky-price" index. Lockhart recommends renewed focus on monetary and credit aggregates.

Lockhart believes that Fed independence on monetary policy remains an essential feature of sound economic policymaking.

Full speech here.

 

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Mon, 03/07/2011 - 10:25 | 1025858 Sudden Debt
Sudden Debt's picture

It's like a drunk who orders and says he'll quit drinking and empties his glass on the floor while ordering a new bottle :)

 

Mon, 03/07/2011 - 12:54 | 1026437 metastar
metastar's picture

I highly suspect that QE3 is coming. I think this says it all ..."Lockhart says QE3 is possible if the US faces another downturn".

So, what does this mean for Gold, Silver, and oil in the short term?

 

Mon, 03/07/2011 - 10:25 | 1025859 Just Observing
Just Observing's picture

Any excuse to start QE3 beats none, I guess.

 

Mon, 03/07/2011 - 10:27 | 1025861 BigJim
BigJim's picture

I guess that explains the (small) dip in PMs and oil.

Mon, 03/07/2011 - 13:53 | 1026648 camaro68ss
camaro68ss's picture

BTFD Bitchez!

Mon, 03/07/2011 - 10:27 | 1025866 malikai
malikai's picture

Possibly related to Fisher's drivel, but it looks like the retail bloodbath in oil may have begun in earnst this morning. Weak hands are now being slain wholesale.

Mon, 03/07/2011 - 10:29 | 1025870 alien-IQ
alien-IQ's picture

Fed Policy: If you can't dazzle them with brilliance...baffle them with bullshit.

Mon, 03/07/2011 - 10:31 | 1025874 silvertrain
silvertrain's picture

3 card monty..

Watch this hand while this hand does something else over here..

Mon, 03/07/2011 - 10:35 | 1025886 SWRichmond
SWRichmond's picture

+1.  Just a lot of jawboning.  Jawboning is all they have left.  Frankly, it's all they ever had.  Fiat is a faith-based initiative for money.

Mon, 03/07/2011 - 10:35 | 1025894 Cognitive Dissonance
Cognitive Dissonance's picture

Praise the Lord and pass the fiat.

Mon, 03/07/2011 - 10:36 | 1025897 malikai
malikai's picture

Here, sit down and have a nice cold cup of kool aid. Bullshit flavor. Now with 20% more lead.

Mon, 03/07/2011 - 10:32 | 1025877 clones2
clones2's picture

He was saying QE3 wouldn't be needed less than a month ago...

Now it is...

Tomorrow, maybe it won't... 

It appears that any changes that could negatively affect GDP to the negative these days....we'll just throw $500 billion at it.

 

Mon, 03/07/2011 - 10:35 | 1025889 99er
Mon, 03/07/2011 - 10:58 | 1025994 bingaling
bingaling's picture

No fundamentals are pointing to an end of the dollar collapse . Unless the FED decides to abruptly end QE2 and line the pockets of some friends out of nowhere that is no way a top .

The other fundie possibility is the euro starts to break apart publically . 1 % it is a top 99% it is not .Huge payoff if that bet hits though .

Mon, 03/07/2011 - 10:35 | 1025891 the not so migh...
the not so mighty maximiza's picture

QE programs will not end.  It is all they got left to give the appearance of normal. 

Mon, 03/07/2011 - 10:36 | 1025896 ZackAttack
ZackAttack's picture

They are doing 'management by trial balloon' to see what the market wants.

At every decision point, in order to predict what will happen, always ask yourself, 'What would most benefit the banks?'

Mon, 03/07/2011 - 10:41 | 1025917 Snidley Whipsnae
Snidley Whipsnae's picture

Dow gapped up 33 points on the open... That is a strong signal that bs regarding an end to QE is ... well, bs...

Mon, 03/07/2011 - 10:47 | 1025952 curbyourrisk
curbyourrisk's picture

duh......which way did he go doc....which way did he go?

Mon, 03/07/2011 - 10:47 | 1025954 sudzee
sudzee's picture

Jawboning just to stop the dive in the dollar.

Mon, 03/07/2011 - 10:48 | 1025957 George Costanza
George Costanza's picture

they have no choice but to monetize the debt. There are not enough buyers at the current interest rates.

Mon, 03/07/2011 - 10:53 | 1025979 MrVincent
MrVincent's picture

Marc Faber was right....he said the fed will "print and print and print"

 

Inflation much?

Mon, 03/07/2011 - 11:01 | 1025999 99er
Mon, 03/07/2011 - 11:00 | 1026000 buzzsaw99
buzzsaw99's picture

The won't know until Immelt and Dimon tell them what to do.

Mon, 03/07/2011 - 11:01 | 1026002 HedgeFundLIVE
HedgeFundLIVE's picture

our PM covered QE2 in his morning meeting today: http://www.hedgefundlive.com/content/dm-in-the-am-3-7-11

Mon, 03/07/2011 - 11:14 | 1026041 docj
docj's picture

You know, it's almost as if these self-proclaimed Masters Of The Universe (tm) have precisely zero idea what the hell is happenening and what, if anything, to do about it.

Of course, that could be precisely the sort of impression they want to give - distracting us while our pockets are continuing to be picked (h/t silvertrain).

But I think I'll stick with "they're clueless and we're doomed" until further revelations push me the other way.

Mon, 03/07/2011 - 11:51 | 1026156 buzzsaw99
buzzsaw99's picture

I don't know why you got junked for that. I'll stick with "they're clueless as how to make it look like the system is working for everyone" or, "they're clueless about how to go back to hiding behind the curtain un-noticed" or something like that.

Mon, 03/07/2011 - 13:59 | 1026655 docj
docj's picture

Probably the same guy/gal who junked silvertrain junked me.  Who knows and who cares.

Mon, 03/07/2011 - 11:22 | 1026066 falardea
falardea's picture

I know I'm going to sound like the stupid noob here, but can someone please explain how QEx is not the same as my credit card company TELLING me I have to borrow more money?

Mon, 03/07/2011 - 11:42 | 1026123 UninterestedObserver
UninterestedObserver's picture

Don't worry - you will only be labeled a stupid noob if you post charts of stock XYZ that is up 4% today

Mon, 03/07/2011 - 11:53 | 1026165 buzzsaw99
buzzsaw99's picture

That is the most astute noob question I've read in quite the while. Congrats!

Mon, 03/07/2011 - 11:23 | 1026072 william the bastard
william the bastard's picture

Jon Hilsenrath of the WSJ is the Fed's straw man:

"Barring a surprising turn in the economy or inflation, it seems increasingly likely that the securities purchase program, known by some as quantitative easing, is likely to end in June as scheduled"

http://online.wsj.com/article/SB10001424052748704504404576184681020981382.html

Mon, 03/07/2011 - 11:40 | 1026109 baby_BLYTHE
baby_BLYTHE's picture

Ben said, "Consumers don't want to buy gold"... "They want to buy clothes, food, energy, etc".

Is the FED trying to tell us they are about to RIP system liquidity and take down the economy again for another harvest?

I am not a millionarie like the rest of you folks and cannot pay high power financial brokers to tell me the truth.

My family is in trouble!

I bought Gold thinking all my meger, yet hard earned dollars would be worthless.

My grandfather lived through the Great Depression. He is still alive and tells me some of the bad stories.

I bought 6 gold coins but am ready to sell them if we are headed for another Depression.

I am only 20. Worked all summer 2010 so I could buy GOLD in the fall!

Mon, 03/07/2011 - 11:43 | 1026129 UninterestedObserver
UninterestedObserver's picture

LOL you sound like a shill - 20, bought gold, family in trouble?

Mon, 03/07/2011 - 11:51 | 1026136 baby_BLYTHE
baby_BLYTHE's picture

A shill, eh? for whom exactly?

Perhaps you are disappointed America isn't collapsing quickly enough for your liking?

Junk for you. People like you make me sick!

Mon, 03/07/2011 - 11:57 | 1026185 THE DORK OF CORK
THE DORK OF CORK's picture

Same thoughts uninterested observer , there was something slightly creepy about your post baby Blythe.

Perhaps you will have to work just a little bit harder on your PSYOPS routine baby.

Just saying.

Mon, 03/07/2011 - 12:02 | 1026192 buzzsaw99
buzzsaw99's picture

Don't hold more than a small percentage of assets in PMs.

Don't listen to goldbugs.

That is all.

Oh, and your whole persona is creepy. :shudders:

Mon, 03/07/2011 - 12:04 | 1026201 baby_BLYTHE
baby_BLYTHE's picture

your avatar is creepy. So there, I guess we are even ;)

Mon, 03/07/2011 - 12:20 | 1026254 ColonelCooper
ColonelCooper's picture

"I am not a millionarie like the rest of you folks and cannot pay high power financial brokers to tell me the truth."

I don't know which part of this more incorrect; that we are all millionaires, or that we get the "truth" from high powered financial brokers.  LOL at that.

 

Mon, 03/07/2011 - 13:03 | 1026450 Hook Line and S...
Hook Line and Sphincter's picture

oh Baby_Blythe...

So, you bought 6 gold coins (of course the lack of size infers 1 oz) by a summer job of 1 season...were you selling your 'man-hole' (also known as boypussy when in regards to 20 year olds)?

Yeah, you're just a little innocent hard working boy with a screen name that doesn't correspond to your lack of confidence and knowledge. 

Please, go collect your .gov check and then actually invest in some PM's for real this time, O.K? 

Your master will soon consume you as he only has allegiance so long as you are useful (not to mention the remaining time that he can remain anyone's master).

Mon, 03/07/2011 - 11:42 | 1026126 THE DORK OF CORK
THE DORK OF CORK's picture

Maybe the higher demand for dollars if oil goes ballistic may reduce the Feds role in storing excess reserves.

The dollar needs higher oil prices as far as I can see it.

Mon, 03/07/2011 - 11:58 | 1026181 Fix It Again Timmy
Fix It Again Timmy's picture

I remember a German farmer expressing as much in a few words as the whole subject requires; "money is money, and paper is paper." - Thomas Paine

Mon, 03/07/2011 - 12:08 | 1026211 baby_BLYTHE
baby_BLYTHE's picture

Benjamin Franklin! A Modest Enquiry into the Nature and Necessity of a Paper Currency in 1729

Kind of the complete opposite of what Dr. Paul talks about.

Who is being truthful here, folks?

Mon, 03/07/2011 - 12:15 | 1026238 THE DORK OF CORK
THE DORK OF CORK's picture

Little advice Baby , don't trust anyone - most of us have skin in the game including the various Tyler's and the somewhat strange quixotic character of Ron Paul

If you want to protect yourself diversify - if you want to make a killing you need to take some risks.

Mon, 03/07/2011 - 12:29 | 1026296 ColonelCooper
ColonelCooper's picture

Wow.  You are twenty.  You scrimped and saved to buy physical gold you can't afford to keep, you disagree with Ron Paul, composed a naively written first post, and then followed it up citing three hundred year old text on fiat currency, and have an oh so clever monniker.

ZH, meet our newest Troll???

Mon, 03/07/2011 - 12:44 | 1026336 baby_BLYTHE
baby_BLYTHE's picture

Why do you wish that on me? GO AHEAD AND DELETE ME! LIFE SUCKS anyways

I activley promote the work Tyler does and send links to everyone I know!

People scratch and shake, but don't know what they can do.

The government prints the money. All we can hope and strive to do is get some of our hands on the meger droppings.

Btw, Franklin is a hero of mine. His life story and work is absolutely fascinating!

Mon, 03/07/2011 - 12:51 | 1026414 Captain Kink
Captain Kink's picture

 An end to QE means end game for the treasury market and the dollar.  I just don't see how they can get out of the corner they've painted  themselves into. 

Mon, 03/07/2011 - 13:12 | 1026507 Hook Line and S...
Hook Line and Sphincter's picture

baby_Blythe,

Here's a great idea... realizing that your .gov check is losing 2-3% of purchasing power per month, it might work out quite nicely if you remove that same % from your alphabet letter sponsors 401k and invest it in silver or gold. This way, you could offset the reduction of your real income loss as you spout out dis-info.

You win both ways!

Mon, 03/07/2011 - 13:20 | 1026539 baby_BLYTHE
baby_BLYTHE's picture

I am only 20 years old. 401k means nothing to me.

I never planned on living past 25... I am on record saying that.

I just want my Mom, Dad and baby sister to live on and stay protected

Mon, 03/07/2011 - 13:41 | 1026601 Hook Line and S...
Hook Line and Sphincter's picture

Prophylactics are a great way to stay protected, and a useful preventative measure, and there are many different brands to choose from. Several years ago, and after a huge amount of due diligence, I finally chose the variety pack for my very own non-existent baby sister.

http://www.condomman.com/page/C/CTGY/Condom-Variety-Packs

In a SHTF scenario, being a sibling who is slated to die in 4 years, this is the most caring way to show your sis that you love her, especially after you're gone.

Warms my heart to pass along info like this to you. All the best in the afterlife to you.

A big, genuine, sincere hug from me.

Mon, 03/07/2011 - 13:38 | 1026605 THE DORK OF CORK
THE DORK OF CORK's picture

If you were a guy I would advise you not to worry long term as there will probably be heavy duty manufacturing jobs coming back to the states withen 5 years or so if this devaluation continues - but there will also be various service / tertiary industries also so don't worry be happy and enjoy your twenties.

Mon, 03/07/2011 - 13:41 | 1026616 ColonelCooper
ColonelCooper's picture

[BARF]

Mon, 03/07/2011 - 13:47 | 1026628 Hook Line and S...
Hook Line and Sphincter's picture

Colonel, 

Is baby_BARF your child?! I looked downstairs to see if mine was on the other computer spoofing me. It's not my kid.

Mon, 03/07/2011 - 13:56 | 1026644 ColonelCooper
ColonelCooper's picture

Nah. Not mine.  Wouldn't put it past him, but he'd be more "GoldMiddelFingerish" and he's not too worried about his sister.

Mon, 03/07/2011 - 13:53 | 1026647 baby_BLYTHE
baby_BLYTHE's picture

The way you talk, I certainlly hope you don't have children.

Trying to "push" condoms on me even though I have ZERO use for one!

 

Mon, 03/07/2011 - 13:58 | 1026653 Hook Line and S...
Hook Line and Sphincter's picture

I am going to spank you...you've been a very bad .gov employee!

Mon, 03/07/2011 - 14:13 | 1026726 baby_BLYTHE
baby_BLYTHE's picture

I barley made it into work today, I am near the end of the line (I am afraid).

Zerohedge is my Homepage.

If I service a computer I either (A) make ZH their HP (B) bookmark and/or tab ZH

I am really trying folks, really!

What is one link I can send to my FB friends if they complain about higher gas prices? I want to keep the focus on the 'money printing' and FED.

Tue, 03/08/2011 - 06:10 | 1028998 Bicycle Repairman
Bicycle Repairman's picture

"I am only 20 years old. 401k means nothing to me.

I never planned on living past 25... I am on record saying that."

You need counseling, not ZH.

Mon, 03/07/2011 - 13:49 | 1026636 Grand Supercycle
Grand Supercycle's picture

I'm sticking to my call on Feb 22 that the DOW topped @ 12,391 on Feb 18 2011 and thus signals the end of the rally.

http://stockmarket618.wordpress.com

Mon, 03/07/2011 - 14:06 | 1026682 viahj
viahj's picture

mourn as Grand Supercycle hath spoken thus this thread has died

Mon, 03/07/2011 - 16:24 | 1027255 ZeroPower
ZeroPower's picture

?

I dont think the smart money got the memo that youre calling a top.

Mon, 03/07/2011 - 13:58 | 1026657 99er
99er's picture

SPX

Diamond Top target is 1244.

http://www.zerohedge.com/forum/99er-charts-0

Mon, 03/07/2011 - 14:09 | 1026697 alangreedspank
alangreedspank's picture

 

Of course you'll have QE3.

Because QE1/2 made things worse, and since worsening of the economy is a prerequisite for another round, then you'll get QE3! QE4, QE5 then the Chinese declare you can only buy their plastic Walmart crap with their newly created gold backed dollar!

 

 

Mon, 03/07/2011 - 20:31 | 1028004 lsjcma
lsjcma's picture

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Tue, 03/08/2011 - 06:16 | 1028999 Bicycle Repairman
Bicycle Repairman's picture

Perhaps it plays out like this:

1.  The idea of continuing QE is floated.

2.  Objections to QE are heard.

3.  The FED slows QE and the market tanks.

4.  The cry goes up "Who'll save my pension?!?!?!?!?"

5.  FED hits the accelerator on QE

6.  Cover of Time: "FED saves the World, Again"

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