Federal Reserve Bank
Heck of a Job ...
While 4 is more than 2, recall that on November 24, one month before the Fed did hike rates by 25 bps, a whopping 9 regional Fed requested a Discount Rate hike: that took place less than a month before the Fed's first rate hike in nearly a decade. With only four regional Feds on the same page as of this moment, it is very unlikely that June is when the Fed's rate hike will take place, and with July missing a press conference, it remains to be seen just how the Fed can proceeds with the much touted rate hike in the coming 2 months.
Yesterday's weak dollar headfake has ended and overnight the USD rallied, while Asian stocks dropped to the lowest level in 7 weeks and crude oil fell as speculation returned that the Federal Reserve will raise interest rates as early as next month. The pound jumped and European stocks gained thanks to a weaker EUR.
This past Thursday marked the one-year anniversary of the US stock market’s death when stocks saw their last high. Market bulls have spent a year looking like the walking dead. They’ve tried to push back up to that distant high that means new life several times, but each time the market falls into a pit again to where the market is once again lower than it was a year ago. These are the last gasps of a stock market (and economy) that is struggling to rise again, which it simply cannot do now that QE has been turned off and the oxygen tank of zero interest is being slowly turned down.
Following last week's lull in global macro, it’s a busy start to the week in which we get the latest deluge of global flash PMIs, while the US economic calendar is loaded with New Home Sales data, Trade Balance, Initial Claims, UMichigan sentiment and the revised US Q1 GDP print on Friday. But perhaps the most expected event will be Yellen's speech on Friday at Harvard's Radcliffe, where the Fed chairman is expected to reveal some more hints on the upcoming rate hike.
- Global stocks see-saw, yields slip as investors get week off to cautious start (Reuters)
- Bayer defies critics with $62 billion Monsanto offer (Reuters)
- Iran has no plans to freeze oil exports, official says ahead of OPEC meeting (Reuters)
- U.S. lifts arms ban on old foe Vietnam as regional tensions simmer (Reuters)
- Anthem, Cigna Privately Bicker as They Seek Merger Approval (WSJ)
After last week's key event, the retail sales number, which the market discounted as being too unrealistic (and overly seasonally adjusted) after printing at a 13 month high and attempting to refute the reality observed by countless retailers, this week has a quiet start today with no data of note due out of Europe and just Empire manufacturing (which moments ago missed badly) and the NAHB housing market index of note in the US session this morning.
In a world in which growth is slowing, is it not strange that the Fed (privately owned by the largest banks in the world) would institute a system of rising payments rewarding banks for not taking risk or lending money! This all tends to make believe that manipulation is the order of the day and the explanation is far simpler than most would believe...
This won't end well...
OPEC is dead, and that’s the biggest news for oil in this new century.
The only thing that stops them is death itself. But, alas, even death won’t save us. For there is always a long line of noble fellows, eager to step in and fight the cause.
"My fear is that central banks are now taking this too far through negative interest rates in particular and that they’re going to literally destroy their own banking systems. If they’re actually successful in generating higher inflation, then they’re going to destroy their own bond markets... our government officials, and I will include the Federal Reserve in that, have failed the American people."
Central bankers have been waging a war against savers. What those central bankers want you to do is either (1) spend money to increase demand, or (2) buy stocks to increase capital. Well, it sure looks like American consumers are not doing the former...
An Update From the Front Lines ...