• Monetary Metals
    05/02/2016 - 01:28
    The price of gold shot up this week, and silver moved proportionally. Headlines are screaming for gold to hit $10,000 or $50,000. Does this alleged new bull market have legs?

Fed Hints At Moar As Economy 'Paused Due To Weather'

Tyler Durden's picture




 

In a slight surprise, the FOMC appears to have seen the recent weakness in macro data as supportive of its ongoing pumpathon even suggesting more is possible:

  • *FED SAYS GLOBAL MARKET STRAINS EASED 
  • *FED SAYS ECONOMY PAUSED DUE TO WEATHER, TRANSITORY ISSUES
  • *FED SAYS ECONOMIC ACTIVITY `PAUSED IN RECENT MONTHS'
  • *GEORGE DISSENTS FROM FOMC DECISION

So let's get this straight: the Fed did not blame the weather in December after Sandy, but blames it in January - weather that can be simply described as a perfectly mild and warmer than average winter?

Pre-FOMC: ES 1502.5, 10Y 2.025%, Crude $97.75, Gold $1678, EUR 1.3570

 

Statement:

For immediate release

Information received since the Federal Open Market Committee met in December suggests that growth in economic activity paused in recent months, in large part because of weather-related disruptions and other transitory factors. Employment has continued to expand at a moderate pace but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has shown further improvement. Inflation has been running somewhat below the Committee’s longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic growth will proceed at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate. Although strains in global financial markets have eased somewhat, the Committee continues to see downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely will run at or below its 2 percent objective.

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

The Committee will closely monitor incoming information on economic and financial developments in coming months. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until such improvement is achieved in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases.

To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Charles L. Evans; Jerome H. Powell; Sarah Bloom Raskin; Eric S. Rosengren; Jeremy C. Stein; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action was Esther L. George, who was concerned that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.

* * *

Full Redline comparison to December FOMC:

 

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Wed, 01/30/2013 - 15:21 | 3199715 Water Is Wet
Water Is Wet's picture

Still not up at federalreserve.gov.

Wed, 01/30/2013 - 15:22 | 3199734 AllThatGlitters
AllThatGlitters's picture

Well, gold is telling the story.  Look at the whipsaw: http://www.pmbull.com/gold-price/

Wed, 01/30/2013 - 15:27 | 3199771 walküre
walküre's picture

and employ its other policy tools as appropriate

What other "tools" do they have left? They went to infinity. We have ZIRP. Other than opening the floodgates and sending out cheques to every citizen and priming the pump for hyperinflation, they've got NO tools to lite the fire.

Wed, 01/30/2013 - 15:29 | 3199781 TerminalDebt
TerminalDebt's picture

I got one word for you - Helicopter

Wed, 01/30/2013 - 15:40 | 3199826 Manthong
Manthong's picture

"Difficulty on the way to victory is opportunity for God to work".

-Henry Wadsworth Longfellow

"or to do God's work"

-me

Wed, 01/30/2013 - 16:31 | 3200067 Almost Solvent
Almost Solvent's picture

Since the FED says the economy paused, I'm going to pause my tax payments until the economy grows again.

Wed, 01/30/2013 - 17:30 | 3200322 Lucius Corneliu...
Lucius Cornelius Sulla's picture

Terrorist

Wed, 01/30/2013 - 15:39 | 3199827 kaiserhoff
kaiserhoff's picture

Well, that tears it.  I'm sure the Dims will introduce a bill soon prohibiting "weather".

While they are at it, maybe Rufus could try his had at holding back the tides.

Wed, 01/30/2013 - 15:29 | 3199784 HoofHearted
HoofHearted's picture

Players gotta play, and central bankers gotta print. Dumb asses that they are.

Wed, 01/30/2013 - 15:31 | 3199796 walküre
walküre's picture

Understood. So instead of printing 85 billion to keep the shitshow going, he might print 185 billion?

I'm not arguing the point but at what time do even the stupidest people realize how baloney this whole process is?

Wed, 01/30/2013 - 15:41 | 3199837 AnonymousCitizen
AnonymousCitizen's picture

So how is this a surprise?

"It's not working yet, we have to keep going."

or

"It's starting to work, we have to keep going."

Wed, 01/30/2013 - 15:43 | 3199852 Divided States ...
Divided States of America's picture

Bernanke and all the Goldmanite Central Bankers can keep blaming the weather for the economic largesse....but didnt they know that all these easy money policy is creating a economic bubble stimulating more production of plastic junk we dont need, more building of residential and office buildings that no one can really afford and are left vacant, and airports that doesnt have any airplanes??? All these constructions occuring simultaneously all over the globe is polluting the environment to an extent that we are seeing the fuckin weather trend go up and down like the stock market did in 2007-2008. Bernanke may be a PhD but he got no clue in social and environmental consequences of his guinea pig financial experiment.

Wed, 01/30/2013 - 15:31 | 3199791 Solid Gold Bubble
Solid Gold Bubble's picture

Fed Zeppelin - Whole Lotta Dove

Wed, 01/30/2013 - 15:44 | 3199857 The Gooch
The Gooch's picture

+100

 

Wed, 01/30/2013 - 15:52 | 3199899 machineh
machineh's picture

'GEORGE DISSENTS FROM FOMC DECISION'

So did Ringo, Paul and John.

Wed, 01/30/2013 - 15:39 | 3199824 you enjoy myself
you enjoy myself's picture

What other "tools" do they have left?

i'm waiting for the day when they announce they're buying derivatives until UE is below 5%.  explaining how that will supposedly help the economy, and is in line with their dual mandate, is guaranteed to be an Orwellian masterpiece.

Wed, 01/30/2013 - 15:42 | 3199843 walküre
walküre's picture

The day that happens is the day you want to be removed from populated areas and be completely off the grid. To look for that place then is too late. To start buying pms then is too late. Trying to withdraw cash to convert is already a problem. If they attempt to balance the derivative bubble with printing, it is game over.

Wed, 01/30/2013 - 15:46 | 3199871 SilverIsKing
SilverIsKing's picture

What do you mean by "if?"

Wed, 01/30/2013 - 16:08 | 3199957 walküre
walküre's picture

Right, for a moment there I looked through an uncracked part in my rose colored glasses. It cracked as well.

Wed, 01/30/2013 - 16:48 | 3200171 SilverIsKing
SilverIsKing's picture

.gov hasn't confiscated your rose colored glasses yet?  They took mine from me about two years ago.

Wed, 01/30/2013 - 15:50 | 3199891 HoofHearted
HoofHearted's picture

 

What other "tools" do they have left?

Uh, Ben Bernanke. Hell, the whole FOMC. Oh, I thought you were asking what tools the banksters had left...nevermind.

Wed, 01/30/2013 - 16:45 | 3200152 SokPOTUS
SokPOTUS's picture

That's not the "tool" they're referring to.  If you haven't felt it yet, you will soon.

AMZN shorts felt it last night.

Wed, 01/30/2013 - 15:23 | 3199744 Water Is Wet
Water Is Wet's picture

It's clear.  The bankers can keep getting free money as long as employment doesn't improve.

Wed, 01/30/2013 - 15:50 | 3199894 Chupacabra-322
Chupacabra-322's picture

It's drizzling outside.  Dam!! We're bankrupt.

Wed, 01/30/2013 - 15:27 | 3199751 SeverinSlade
SeverinSlade's picture

Still don't see how this suggests more easing and possibly an expansion of it.

Economy slowing is "transitory" and attributed to weather and other variables.

Global market strains "eased."  Meaning less support is needed.

Am I missing something?

SIDE NOTE

federalreserve.GOV

That's funny right there.

Wed, 01/30/2013 - 15:20 | 3199716 Bunga Bunga
Bunga Bunga's picture

Not the flu?

Wed, 01/30/2013 - 15:22 | 3199727 RSBriggs
RSBriggs's picture

No, that's the excuse for next time.

Wed, 01/30/2013 - 15:30 | 3199790 SeverinSlade
SeverinSlade's picture

"The economy got a mild flu in Q1.  Instead of expanding our asset purchases, the FOMC has prescribed soup, crackers, and gatorade."

Wed, 01/30/2013 - 15:21 | 3199718 FL_Conservative
FL_Conservative's picture

Who wouldn't want 50% MOAR??

Wed, 01/30/2013 - 15:25 | 3199746 Zap Powerz
Zap Powerz's picture

If they say a negative growth rate is due to weather then there is no doubt left the USA has gone full retard.

Wed, 01/30/2013 - 15:48 | 3199882 SilverIsKing
SilverIsKing's picture

So this is what's needed to remove any doubt that the USA has gone full retard?

Wed, 01/30/2013 - 15:20 | 3199719 slaughterer
slaughterer's picture

Pretty comatose reaction.

Wed, 01/30/2013 - 15:20 | 3199720 Stonedog
Stonedog's picture

Well all of that used up my bullshit quota for the day.

Wed, 01/30/2013 - 15:21 | 3199722 Zap Powerz
Zap Powerz's picture

Bunch of retarded motherfuckers.  Their plan doesnt work and so what will they do? MOAR OF THA SAM3!!!!elev3enty!11

Wed, 01/30/2013 - 15:23 | 3199737 EscapeKey
EscapeKey's picture

Reminds me of something Einstein said.

Well, that and Groundhog Day.

Wed, 01/30/2013 - 15:33 | 3199804 Bunga Bunga
Bunga Bunga's picture

Well, science isn't their field.

Wed, 01/30/2013 - 15:44 | 3199866 The Gooch
The Gooch's picture

"I Got You Babe"

Wed, 01/30/2013 - 15:21 | 3199723 Dr. Engali
Dr. Engali's picture

Transitory bitchez!

Wed, 01/30/2013 - 15:21 | 3199728 walküre
walküre's picture

MOAR what? I guess to INFINITY and BEYOND.

We are going BEYOND

Wed, 01/30/2013 - 15:22 | 3199730 rubearish10
rubearish10's picture

So the economy farted?

Wed, 01/30/2013 - 15:22 | 3199733 EscapeKey
EscapeKey's picture

We DEFINITELY need more printing. The more we print, the more the Dollar is worth.

/Give me a fucking break, first all the anchors tell us how strong the economy is despite the GDP numbers, now they say they need to print more. It's all fucking lies.

Wed, 01/30/2013 - 15:26 | 3199762 El Hosel
El Hosel's picture

 "The Markets" don't know what to make of all this ......  WTF,  pass the fairy dust and god bless the "recovery".

Wed, 01/30/2013 - 15:28 | 3199773 El Hosel
El Hosel's picture

.... "Markets suffer biggest setback in months", Dow down 26.

Wed, 01/30/2013 - 15:22 | 3199735 Zap Powerz
Zap Powerz's picture

Hey, ASSHOLES!  WE ALWAYS FUCKING HAVE WEATHER!

Seriously, who believes this bullshit? Weather? Really?  Its always something other than the central planners stupid fucking plans right?

Wed, 01/30/2013 - 15:57 | 3199927 Stuffs And Stuff
Stuffs And Stuff's picture

The Sun! There's too much of it!

Wed, 01/30/2013 - 15:22 | 3199736 RunningMan
RunningMan's picture

Paused? No way. Sectors of the US economy have been in lockdown since August. Anemic at best. I think Q2 will print at -1%GDP unless there is a miracle.

Wed, 01/30/2013 - 15:29 | 3199778 CrashisOptimistic
CrashisOptimistic's picture

You may mean Q1, since this report was for Q4.

But you also may have a point in that the Sequester would hit in Q2.

Wed, 01/30/2013 - 16:26 | 3200043 RunningMan
RunningMan's picture

Good catch - I meant Q1. My crystal ball was smashed against the wall some time ago, so no idea what will happen Q2. Or after.

Wed, 01/30/2013 - 15:30 | 3199786 walküre
walküre's picture

"since August" - affirmative on the time frame

Business was ok until then. Since August even muddling through won't pay the bills.

Wed, 01/30/2013 - 15:57 | 3199924 Poetic injustice
Poetic injustice's picture

Is war a miracle or blessing?
I see no other way of getting positive GDP there, as government will buy more assault weapons and other "hardware" instead of reformation.

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