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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 - 15:24 | 3199745 IamtheREALmario
IamtheREALmario's picture

I wonder if these people believe they are contributing anything of value to the world... contrary to the evidence.

Wed, 01/30/2013 - 15:24 | 3199747 Dr. Engali
Dr. Engali's picture

"Inflation has been running
somewhat below the Committee’s longer-run objective"

 

 

Translation...There is plenty of room for moar printing.

Wed, 01/30/2013 - 15:30 | 3199785 Cognitive Dissonance
Cognitive Dissonance's picture

"......Committee's longer-run objective"

Always nice to know the thieves have long range plans.

<Gold seems to think they will crank up the printing press another notch or six.>

Wed, 01/30/2013 - 15:33 | 3199806 Dr. Engali
Dr. Engali's picture

Ben's printing press goes up to 11

 

 

http://www.youtube.com/watch?v=EbVKWCpNFhY

Wed, 01/30/2013 - 15:46 | 3199870 The Gooch
The Gooch's picture

It's one MOAR.

Wed, 01/30/2013 - 15:41 | 3199839 Shameful
Shameful's picture

Would love for them to put out their real "long-run objective", but maybe the masses wouldn't like Dollar to Dong parity.

Wed, 01/30/2013 - 15:24 | 3199748 new game
new game's picture

moar is better

paused my ass

the weather-ya sure

excuses, excuses.

some ask them to check their cog dis and stand in front of mirror until they can figure out what the hell they are up.

40 + 45+ moar = absolute craziness IMFO

Wed, 01/30/2013 - 15:28 | 3199750 thismarketisrigged
thismarketisrigged's picture

fuck these assholes.

 

i cant wait for fridays unemployment number.

 

either way these criminals will find a way to pump it up

unemployment drops= fraudsters will take that as a sign that things r getting better, reason to pump markets to all time high.

 

unemployment rises= fraudsters will pump markets to new highs because that would mean more stimulus.

 

fucking joke, fuck u bernanke and obama, and all central bankers worldwide, and wall st

Wed, 01/30/2013 - 15:25 | 3199755 q99x2
q99x2's picture

Did they say anything about when we were susposed to stop having weather?

Wed, 01/30/2013 - 15:34 | 3199808 TerminalDebt
TerminalDebt's picture

as soon as it starts raining 100 dollar bills

Wed, 01/30/2013 - 15:26 | 3199757 MFLTucson
MFLTucson's picture

Obama is 150% responsible for this, his tax and spend liberal agenda is having the same affect as Hollande in France.

Wed, 01/30/2013 - 15:32 | 3199803 pods
pods's picture

Ummm, no.  Math is responsible.

But whatever gets you to sleep at night.

pods

Wed, 01/30/2013 - 15:38 | 3199818 Dr. Engali
Dr. Engali's picture

We will just pretend like the 10 trillion of debt accumulated before he took office never existed.

Wed, 01/30/2013 - 15:40 | 3199834 Cast Iron Skillet
Cast Iron Skillet's picture

yeah! If the repugnicans were in there, they'd have the bugdet balanced and the debt paid off by now!

Wed, 01/30/2013 - 16:42 | 3200130 SokPOTUS
SokPOTUS's picture

You say Thelma, I say Louise...

Wed, 01/30/2013 - 15:26 | 3199759 Joe moneybags
Joe moneybags's picture

Esther George for President 2016

Wed, 01/30/2013 - 15:26 | 3199760 Kaiser Sousa
Kaiser Sousa's picture

"yeah, well sometimes nothing is a real cool hand...."

Cool Hand Luke

Wed, 01/30/2013 - 15:27 | 3199763 JustPrintMoreDuh
JustPrintMoreDuh's picture

Moar is not only possible ... its the only option left until the final curtain call.

Wed, 01/30/2013 - 15:27 | 3199765 azzhatter
azzhatter's picture

I hate when it's cold in winter and hot in summer. Just screws everything up

Wed, 01/30/2013 - 15:27 | 3199766 Cursive
Cursive's picture

The financial repression will continue until morale improves.

 

P.S. Congrats to Ms. George.  Apparently she's the only governer with a conscience and a set of balls.

Thu, 01/31/2013 - 07:37 | 3201870 JuicedGamma
JuicedGamma's picture

I fest exactly the same way after reading this.

It's like the old joke, "the beatings will continue til moral improves" especially relevant on long ocean voyages.

Wed, 01/30/2013 - 15:26 | 3199767 Dr. Engali
Dr. Engali's picture

Since 6.5% is the target rate for unemployment it will never again drop bellow 8%

Wed, 01/30/2013 - 17:05 | 3200250 FoeHammer
FoeHammer's picture

Hey Doc,

Did you see whiteshadow's comments about building up the welfare state?

I think you're right in the sense that the Fed is here to buy treasuries because the private market (IE China) has disappeared. It has nothing to do with true employment and so they have to continually make up reasons to justify the intervention. What are your thoughts?

Wed, 01/30/2013 - 15:28 | 3199770 Gimp
Gimp's picture

Feel like I am walking a used car lot.....moar excuses..

Here is the problem in a nutshell - STOP PRINTING F**KING MONEY - Get it.

Wed, 01/30/2013 - 15:31 | 3199772 monopoly
monopoly's picture

Weather. Of course. I thought the slowing was due to fundamentals and the fact that we are broke and insolvent. How stupid of me.

Wed, 01/30/2013 - 16:40 | 3200118 SokPOTUS
SokPOTUS's picture

...and as we all know, Karl Rove controls the weather.  So we really need to get the Architect to opine here on this.  I'm sure his analysis will be just as prescient as always...

Wed, 01/30/2013 - 15:29 | 3199776 AZLagun
AZLagun's picture

The weather, ha!  What a joke!  Reminds me of a Millie Vanilli top hit from back in the day.  "Blame it on the rain"......We all know how that ended.

http://www.youtube.com/watch?v=NwrL9MV6jSk

Wed, 01/30/2013 - 15:28 | 3199777 Spastica Rex
Spastica Rex's picture

The pause in the economy was like a rewind before an epic drop in a dub step song.

God, I hate dubstep.

Wed, 01/30/2013 - 17:07 | 3200256 FoeHammer
FoeHammer's picture

Drop the Labor Force Bass!

Wed, 01/30/2013 - 15:29 | 3199779 krispkritter
krispkritter's picture

The Fed says the weather's a drag

But they still have more QE in the bag

Sandy did blow

$80 billion you know

But it's really because of Ben the douchebag.

Wed, 01/30/2013 - 15:31 | 3199792 CrashisOptimistic
CrashisOptimistic's picture

SANDY reconstruction IS ALREADY UNDERWAY AND IS IN THAT -0.1% report.  That's what homeowner's insurance is.

The Federal pork coming just offsets the millionaire's tax (almost dollar for dollar) as regards GDP drag.

Wed, 01/30/2013 - 15:29 | 3199782 firstdivision
firstdivision's picture

The market seems confused as movement hasn't been as erratic as usual.  Is there a delay in getting it to the algos?

Wed, 01/30/2013 - 15:29 | 3199788 magnumpk
magnumpk's picture

Inflation should remain at or below 2% for those of us who don't drive a car or eat food.

Wed, 01/30/2013 - 15:36 | 3199815 TerminalDebt
TerminalDebt's picture

Inflation should remain at or below 2% for those of us who drive a Euro shitbox car and eat dog food.

 

Fixed

Wed, 01/30/2013 - 15:31 | 3199794 pods
pods's picture

Was that release trying to move their inflation target to 2.5%?

The FED has the perfect setup to QE to the moon.
Their policy is the cause of the problem they are trying to fix.

Reminds me of the AIDS debacle where AZT kept killing AIDS patients they were "treating."  

On a side note, I have found an outlet for all of this that is really productive.

Gold prospecting.  Being outdoors relieves stress, and any proceeds of my forays will also relieve stress.

Win win.

pods 

Wed, 01/30/2013 - 15:41 | 3199835 Dr. Engali
Dr. Engali's picture

I thought about prospecting but I decided to drink instead.

Wed, 01/30/2013 - 15:56 | 3199922 Orly
Orly's picture

Seriously, I have thought about that myself.  Just for kicks...

How do you know where to look?

Wed, 01/30/2013 - 16:15 | 3199996 Goyim Sheep
Goyim Sheep's picture

Your chances of finding any increase the farther you get from the vaults in NYC. Just trying to help.

Wed, 01/30/2013 - 16:21 | 3200024 pods
pods's picture

Just starting out this spring in NC.  Plenty of areas around within an hour or two and I am brushing up on my geology too!

Tons of information about historical areas as well as formations that have yielded it in the past.  

Couple hundred bucks can get you panning stuff and a small sluice.  

There are some pay to pan places, but I am scouting some private land to get permission as well as public access places.

Hell, the worst that happens is I find no gold being in the woods, which I like to do anyways.

pods

Wed, 01/30/2013 - 17:11 | 3200266 FoeHammer
FoeHammer's picture

"Hell, the worst that happens is I find no gold being in the woods, which I like to do anyways."

 

Sounds like a win-win to me as well!

Wed, 01/30/2013 - 15:32 | 3199798 Forty Six and 2
Forty Six and 2's picture

Moar = Less

Less = Moar

Wed, 01/30/2013 - 15:33 | 3199799 Bam_Man
Bam_Man's picture

It's called stagflation, bitchezzz! And it has nothing to do with the weather.

Wed, 01/30/2013 - 15:32 | 3199800 VonManstein
VonManstein's picture

red bonds red stocks red USD green Pms all on FOMC day. More of this in the future

Wed, 01/30/2013 - 15:33 | 3199802 LongSoupLine
LongSoupLine's picture

No matter what they fucking say, Bernanke will continue to pump hot fucking fiat into the banks.

 

You expect them to publically say what they're going to really do?

 

Fuck you Bernanke.  fucking ass.

Wed, 01/30/2013 - 15:38 | 3199820 walküre
walküre's picture

Bingo. All CBs are buying their nations paper because the amount of paper is too big to be funded through the economy (a.k.a investors).

Paper, paper everywhere and no yield. Just to keep things going without offending or hurting anyone. In the meantime and in the darkness, those same CBs are buying metals. Suppressing the price so they can load up cheap with worthless paper.

It will be the WTF moment of mankind when they declare one day that the paper is worthless and that they have a new paper coming.

Wed, 01/30/2013 - 15:32 | 3199805 Its Only Rock N Roll
Its Only Rock N Roll's picture

Gotta love it when the Fed uses the word "TRANSITORY"...ie "we don't know wtf is going on but we are going to do MOAR of the same"

Nothing to see here folks....move along

Wed, 01/30/2013 - 15:35 | 3199812 Yen Cross
Yen Cross's picture

 That Fed. statement should make that fucking worthless schlep "Chair Satan", really popular with central bankers around the world.

[sarc]

Wed, 01/30/2013 - 15:37 | 3199817 Jack Burton
Jack Burton's picture

People have a finite amount of money to spend. WTF does it matter if they wait out a snowstorm to go spend it.

You need income growth to spur spending growth to spur economic growth. Borrowing is reaching a limit due to lack of median income growth.

"The weather did it"? For fuck's sake, when does this stupid shit end?

Wed, 01/30/2013 - 16:15 | 3199998 nantucket
nantucket's picture

they never seem to do the same for good weather or periods after bad weather.  just once I want to hear "July and August were fantastic months, hardly rained anyhwere, so 3Q GDP was not really as strong as it looked".   ya never hear that.

Wed, 01/30/2013 - 15:39 | 3199821 100pcDredge
100pcDredge's picture

Moar? http://flamesnation.ca/uploads/Image/moar.jpg

Owait: Maori!

Of course... Let me guess: they want their gold back - don't they?

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