The 'Other' Confidence Indicator

Tyler Durden's picture

Presented with little comment, but as we head into another FOMC meeting, we remind all those 'recovery is just around the corner'-ites that the market's expectations for how long the Fed will be on hold has never been higher at around 35 months - certainly doesn't suggest an expectation of things getting better in reality any time soon.



Chart: BofAML

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Stackers's picture

You sure thats not years on the left hand scale ?

buzzsaw99's picture

+1 - 35 years is more likely imo

Boris Alatovkrap's picture

"how long the Fed will be on hold has never been higher at around 35 months"

Duration of Mismatch is central problem of FOMC. Raise Treasury rate, Bank is lose reserve capital in fleeing deposits, further is contraction of credit. Shadow credit is also contraction, so currency is to stop to flow and banking system is SOL.

ZIRP Forever!

midtowng's picture

But wait! I read that the Fed has an exit plan. LOL

Bay of Pigs's picture

End of 2015 then?

And a hefty .25% hike.

Dr. Engali's picture

There will never be a rate hike again. Any rate hikes will blow up the fed's balance sheet.

malek's picture

Exactly, and not just the fed's.

ZIRP will end when the currency implodes, and not one day sooner.

Boris Alatovkrap's picture

Bernanke is talk smart talk, Dual Mandate, blablablab, but is real situation, how do you say, "fool in". Federal Discount Rate permanently is ZERO - cannot go up or will break bank, but is cannot go lower. Lend long, borrow short, cross line and can't turn back.

Mister Ponzi's picture

You forgot to mention that the chart is in log scale.

Uber Vandal's picture

I wonder how the Bank of Japan's chart looked since September, 1995?

FYI, they have not had an interest rate above 3/4 of 1% since that time, or 17+ YEARS of ZIRP.

ball-and-chain's picture

Let's be honest.

We're in a depression.

We've been through the biggest bubble in human history.

It's gonna take a decade to dig ourselves out.

Sucks.  But thems the facts.

JackT's picture

A decade from now or the one that has already passed?

Boris Alatovkrap's picture

Decade passed is dig hole, next decade is dig out.

Hohum's picture

ZIRP & QE are covering up the fact that industrial society cannot pay for itself.  Better hope for some nuclear fusion, boys!

TulsaTime's picture

ZIRP is the final cancer the Fed has bequeathed this system. So no risk exists at the fed to corp level anymore? Where does anything expand in a peak/full world?

Nobody has a way to manage a contracting system, yet we have declines to deal with in water, net available energy, natural resources, etc.. All we hear from anyone is growth, and it is not forthcoming.

Aegelis's picture

I think I've ridden on this rollercoaster before.  I know what happens when we get to the top.