Thanks a LOT, Fed ...
Caution is called for because of Fed’s limited ability to reduce policy rate, Federal Reserve Bank of New York President William Dudley says, Dudley comments in text of speech in Bridgeport, CT. “Although the downside risks have diminished since earlier in the year, I still judge the balance of risks to my inflation and growth outlooks to be tilted slightly to the downside”
"[There was] a lot of ‘let’s not forget the far more hawkish statements other Fed officials made last week,’ [but] this was not a bolt out of the blue. As she spoke, I couldn’t help picturing a mother lion swatting her misbehaving cubs back into line."
At the end of the day, it was all about the dollar and the reason for this morning's stock surge around the globe, as we noted last night, is absurdly delightful: Yellen signaled "weakening world growth" and "less confidence in the renormalization process." In other words, the "bad news is good news" mantra is back front and center.
Nefarious foreign hackers, blacked out CCTV systems, corrupt local bank managers, shifty go-betweens, and $30 million in cash delivered to an anonymous man of "Chinese origin" who disappeared into the shadows of Manila and will likely never be heard from again. This story has it all. It even has Bill Dudley.
Former Fed Employee Avoids Jail, Gets $2,000 Fine For Stealing Fed Secrets On Behalf Of Goldman SachsSubmitted by Tyler Durden on 03/16/2016 15:20 -0400
Jason Gross was the latest former banker to make a mockery of the US judicial system when he was spared prison on Wednesday, for stealing NY Fed secrets on behalf of Goldman Sachs. Instead Gross, 37, was fined $2,000 by U.S. Magistrate Judge Gabriel Gorenstein in Manhattan and sentenced to a year of probation with 200 hours of community service after pleading guilty to a misdemeanor charge of theft of government property.
The story of the theft of $100 million from the Bangladesh central bank - by way of the New York Federal Reserve - is getting more fascinating by the day.
“It can’t be that they don’t have any responsibility!"
The Fed's Bill Dudley just unleashed the most cognitively dissonant statement of his career. That superlative is highlighted by theses two headlines:
DUDLEY SAYS U.S. ECONOMY IS IN QUITE GOOD SHAPE
DUDLEY: DON'T SEE NEGATIVE RATES HAVING 'BIG CONSEQUENCE'
Try telling The BoJ's Kuroda that!!
It seems monetary policy is exhausted and the next exogenous lever to pull would be political fiscal initiatives. If/when they fail to stimulate demand, there would be only one avenue left – currency devaluation. If/when confidence in the mightiest currency wanes, we would expect the US dollar to be devalued too - not against other fiat currencies, but against a relatively scarce Fed asset.
In the fourth quarter, lending standards tightened for the second consecutive quarter. This is problematic because as DB's Jim Reid writes, two consecutive quarters of tightening standards "has never happened before without it signalling an eventual move into recession and a notable default cycle. Once we have 2 such quarters lending standards don't net loosen again until the start of the next cycle."
Futures Jump After Bill Dudley Hints At Fed "Policy Error", Warns Of "Significant Consequences" From Strong DollarSubmitted by Tyler Durden on 02/03/2016 10:37 -0400
"A weakening of the global economy accompanied by further appreciation in an already strong dollar could also have "significant consequences." I read that as saying we're acknowledging that things have happened in financial markets and in the flow of the economic data that may be in the process of altering the outlook for growth and the risk to the outlook for growth going forward."
- Bill Dudley
The Fed Vice-Chair has begun laying the groundwork for NIRP in the US.
Bill Dudley and the Federal Reserve (Fed), in their efforts to influence economic growth may have created a speculative and consumption driven environment that is crushing productivity growth. Ingenuity, not debt, made America an economic powerhouse. If we are to resume down that path we need the Fed to end their “self-defeating” policies and in its place we must demand ingenuity from them. The Fed, along with government, needs to properly incent productivity. The Fed should start this arduous task by removing excessive stimulus which will take the speculative fervor out of markets and allow asset bubbles to deflate.
In July it was 5, then in October the number rose to 8, and moments ago we learned that during the meetings on October 15 and 22, a total of nine regional Feds had asked to increase the Fed's discount rate from 0.75% to 1.00%, with Boston joining the St. Louis, Atlanta, San Francisco Fed, Cleveland, Dallas, Philadelphia, Kansas City and Richmond Fed. Two banks, the Chicago and NY Fed wanted to keep rates at 0.75%, while the domain of Fed's uber dove Kocherlakota, the Minneapolis Fed where former Goldmanite Neel Kashkari will soon operate, asked for a Discount Rate cut to 0.50%.