FOMC Minutes: Hawkish Rumblings Getting Louder

Tyler Durden's picture


It would appear that even though the relative dovishness of the FOMC has increased, a realization that the party has to stop sometime is dawning on the PhDs - though for now, the printing will continue until morale improves...


Pre-FOMC: ES 1521.00, 10Y 2.01%, EUR 1.3337, Gold $1580, WTI $94.18

Some of the key sections:

However, a few participants expressed concerns that the current highly accommodative stance of monetary policy posed upside risks to inflation in the medium or longer term.

On the death of Okun's Law:

A number of participants thought that the growth of potential output had been reduced in recent years, possibly in part because restrictive financial conditions and weak economic activity in the aftermath of the financial crisis had reduced investment, business formation, and the pace of adoption of new technologies. Many of these participants worried that, should the economy continue to operate below potential for too long, reduced investment and underutilization of labor could further undermine the growth of potential output over time. A couple of participants noted that uncertainties concerning both the level of, and the source of shifts in, potential output made it difficult to base decisions about monetary policy on real-time measures of the output gap.

But punchline #1:

Several participants emphasized that the Committee should be prepared to vary the pace of asset purchases, either in response to changes in the economic outlook or as its evaluation of the efficacy and costs of such purchases evolved. For example, one participant argued that purchases should vary incrementally from meeting to meeting in response to incoming information about the economy. A number of participants stated that an ongoing evaluation of the efficacy, costs, and risks of asset purchases might well lead the Committee to taper or end its purchases before it judged that a substantial  improvement in the outlook for the labor market had occurred. Several others argued that the potential costs of reducing or ending asset purchases too soon were also significant, or that asset purchases should continue until a substantial improvement in the labor market outlook had occurred. A few  participants noted examples of past instances in which policymakers had prematurely removed accommodation, with adverse effects on economic growth, employment, and price stability; they also stressed the importance of communicating the Committee’s commitment to maintaining a highly accommodative stance of policy as long as warranted by economic conditions. providing monetary accommodation by holding securities for a longer period than envisioned in the Committee’s exit principles, either as a supplement to, or a replacement for, asset purchases.


A few participants commented that the Committee’s accommodative policies were intended in part to promote a more balanced approach to risk-taking, but several others expressed concern about the potential for excessive risk-taking and adverse consequences for financial stability. Some participants mentioned the potential for a sharp increase in longer-term interest rates to adversely affect financial stability and indicated their interest in further work on this topic.

And #3:

Many participants also expressed some concerns about potential costs and risks arising from further asset purchases.

Another headfake from a Fed which will never, ever stop monetizing, or just more schizophrenia from Bernanke and Co? Why both of course.

And, in tangential news, this is what @Not_Jim_Cramer suspected the real minutes wordcloud looked like...

Full minutes:

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Wed, 02/20/2013 - 15:03 | 3260526 The Gooch
The Gooch's picture



Wed, 02/20/2013 - 15:07 | 3260541 Ahmeexnal
Ahmeexnal's picture

Silver falling towards a 27 handle as we speak.
They're so predictable.
Time to stack some more!

Paging Barf Chillstoned.
Paging Barf Chillstoned.

Wed, 02/20/2013 - 15:08 | 3260557 nope-1004
nope-1004's picture



  • LOL.  $1Trillion this year in easing and that's the headline?

    LMFAO.  Bunch of lies.


    Wed, 02/20/2013 - 15:09 | 3260567 AL_SWEARENGEN
    AL_SWEARENGEN's picture

    Watch what the cocksuckerz do, never what they say.

    Wed, 02/20/2013 - 15:12 | 3260590 Mr Lennon Hendrix
    Mr Lennon Hendrix's picture

    They are buying gold.

    Wed, 02/20/2013 - 15:14 | 3260613 nope-1004
    nope-1004's picture

    So am I.  I know where this is going, and it's not back to 4% unemployment.


    Wed, 02/20/2013 - 15:31 | 3260642 TruthInSunshine
    TruthInSunshine's picture

    These "grumblings" will grow larger in subsequent FOMC meetings, and are actually a way to try and "talk" what are now highly exuberant (some dare call them irrational) markets down from the suicide perch that Bernanke pushed them up to.

    Bernanke Will Never Voluntarily Stop Printing. His "Virtuous Circle" Will Implode The Second He Does (It Will Implode Either Way, Just Sooner If He Stops Printing.)

    Wed, 02/20/2013 - 15:41 | 3260718 The Thunder Child
    The Thunder Child's picture


    Dafuq planet are these guys on, do they think we all smoke can?


    LMAO just saw Lance Armstong in the wordcloud

    Wed, 02/20/2013 - 17:11 | 3261106 TonyCoitus
    TonyCoitus's picture

    I gotta say it..........



    Wed, 02/20/2013 - 18:35 | 3261398 zaphod
    zaphod's picture

    So a minority of the FED said they were worried about printing >$80B per month, and maybe sometime we should only print a bit less such as $60B per month.

    If this is truly considered hackish today, then we're getting closer to the end of fiat.

    Wed, 02/20/2013 - 15:15 | 3260615 AllThatGlitters
    AllThatGlitters's picture

    Gold dipped, then reversed higher.  Sell the rumor, Buy the news?

    Live Spot:

    Wed, 02/20/2013 - 15:45 | 3260761 agent default
    agent default's picture

    That would be the Fed buying Germany's 300 tons.  Because all the gold is there right? RIGHT??? 

    Wed, 02/20/2013 - 15:15 | 3260618 Pladizow
    Pladizow's picture

    Comex paper capitalizing on this "Fed Speak."

    Wed, 02/20/2013 - 15:17 | 3260628 camaro68ss
    camaro68ss's picture

    Hahaha, That world Cloud is F*** Sweet!

    Wed, 02/20/2013 - 15:23 | 3260663 venturen
    venturen's picture

    What no Goldman in the Word Cloud. What is with that? It is the company that can't be named...ala Harry Potter villian? 

    Wed, 02/20/2013 - 15:25 | 3260672 TruthInSunshine
    TruthInSunshine's picture

    Rumor has it that the FOMC members enjoyed a lunch courtesy of Carl's Jr. during their meeting.

    Wed, 02/20/2013 - 15:33 | 3260697 pods
    pods's picture

    I was looking for Astroglide.

    I think that is what Chevy Chase put on the bottom of his sled in Christmas Vacation.


    Wed, 02/20/2013 - 15:14 | 3260612 Nothing To See Here
    Nothing To See Here's picture

    Obama will never let the QE stop. Bernanke will be terminated if need be. All rumors that the easing can be slowed down are merely MOPE.

    Wed, 02/20/2013 - 16:17 | 3260879 Imminent Crucible
    Imminent Crucible's picture

    This is all theater for the halfwits and tradebots.  Bernankes may come and go, but the easing must continue. Keep in mind these are the "doctored" minutes. What was really said at the FOMC meeting will not be available until five years from now.

    The Fed has no choice. Both markets and GDP are utterly addicted to continued monetization so that the Treasury can keep mailing out checks and so Times Square doesn't turn into Syntagma Square. The Fed knows that the inflation mentality is taking root in the populace and bond yields are rising, so they're attempting to jawbone yields back down without actually doing anything that would rein in the money supply. The Treasury complex is rising across all maturities:

    Wed, 02/20/2013 - 15:19 | 3260632 Stoploss
    Stoploss's picture

    the printing will continue until morale improves...





    Wed, 02/20/2013 - 17:27 | 3261173 augustusgloop
    augustusgloop's picture

    When morale improves, find another metric. tie QE to literacy rates in inner city neighborhoods, fleet avg. MPGs 


    "we are not the currency debasers you're looking for"

    Wed, 02/20/2013 - 15:10 | 3260580 strannick
    strannick's picture

    Paging Bart Shill-ton

    How is the silver investigation coming?

    Paging Bart Shill-ton


    Wed, 02/20/2013 - 15:16 | 3260626 Mr Lennon Hendrix
    Mr Lennon Hendrix's picture

    Are he and Assange from the same family cult?

    Wed, 02/20/2013 - 15:24 | 3260666 Xibalba
    Xibalba's picture

    He don't wanna get suicided.  So shill keep mouth sut. 



    Wed, 02/20/2013 - 15:09 | 3260570 hankwil74
    hankwil74's picture

    You can add it to the silver you stacked at $36, $34, $32, $30, and $28... keep BTFDs, right?

    Wed, 02/20/2013 - 15:12 | 3260588 strannick
    strannick's picture

    Or you can just go ahead and keep stacking your FedRes notes. Should be able to start stacking bails of it soon, with 1 trillion a year coming hot of the presses. 

    Wed, 02/20/2013 - 15:14 | 3260609 hankwil74
    hankwil74's picture

    Been stacking SPY since 2009, and I've been BTFDs... Can't fight the Fed

    Wed, 02/20/2013 - 15:23 | 3260654 TWSceptic
    TWSceptic's picture

    Too bad you didn't buy PMs since 2009, would have protected you better against inflation.

    Wed, 02/20/2013 - 15:32 | 3260693 slightlyskeptical
    slightlyskeptical's picture

    I hope this is sarcasm and I hope the people that starred you get it.

    If not...well don't know what to say other than pull your head out of the dillusion.

    Wed, 02/20/2013 - 19:08 | 3260842 TWSceptic
    TWSceptic's picture

    Why would it be sarcasm?

    Wed, 02/20/2013 - 15:36 | 3260708 hankwil74
    hankwil74's picture

    I'll take my long CMG longs from $120, tyvm

    Wed, 02/20/2013 - 16:20 | 3260897 Imminent Crucible
    Imminent Crucible's picture

    Can't fight Gideon Gono!  Oh, wait......

    Wed, 02/20/2013 - 15:32 | 3260690 Bastiat
    Bastiat's picture

    Kiss the godfather's ring.

    Wed, 02/20/2013 - 15:21 | 3260659 donsluck
    donsluck's picture

    Numbers don't lie. +1

    Wed, 02/20/2013 - 15:13 | 3260600 Central Wanker
    Central Wanker's picture

    The volume is extremely heavy.

    Wed, 02/20/2013 - 15:19 | 3260641 Beam Me Up Scotty
    Beam Me Up Scotty's picture

    The Fed is going to need a rather large tampon to soak up all that excess liquidity.

    Wed, 02/20/2013 - 15:06 | 3260543 DJ Happy Ending
    DJ Happy Ending's picture

    The Fed could care less. They have been fucking you for generations.

    Wed, 02/20/2013 - 16:40 | 3260988 Shizzmoney
    Shizzmoney's picture

    Bernanke reminds me of when Teddy KGB clucks like a chicken and tells Mike McD "I stick it in you"

    Wed, 02/20/2013 - 15:05 | 3260528 Mr Lennon Hendrix
    Mr Lennon Hendrix's picture

    Hawkish rumblings?  Yeah fucking right.  They just doubled QE and it is the tenth round of QE.  If it was true than they would do more than talk.

    Wed, 02/20/2013 - 15:07 | 3260549 FL_Conservative
    FL_Conservative's picture

    Exactly.  The toothpaste is out of the fucking tube already.  Now what are you going to do Bennie Boy?

    Wed, 02/20/2013 - 15:10 | 3260576 Mr Lennon Hendrix
    Mr Lennon Hendrix's picture

    Any good con man knows - Say one thing, and do another.

    The Fed is the ultimate con; buying toxic debt that the banks that govern the Fed's board can't own less they go bankrupt. 

    The Fed at this point is the most bankrupt bank in the history of banks.  Period.

    Wed, 02/20/2013 - 15:13 | 3260604 strannick
    strannick's picture

    QE: Talk it down, print it up

    Wed, 02/20/2013 - 15:07 | 3260553 NeedleDickTheBu...
    NeedleDickTheBugFucker's picture

    Hawkish rumblings = Fed securities purchases reduced to $84.999 MM per month.

    Wed, 02/20/2013 - 15:11 | 3260584 mind_imminst
    mind_imminst's picture

    They cannot tighten (willingly). Everyone who reads Zerohedge should be on to the game by now. Talk is cheap, and the CBs will use "talk" as much as they can to manipulate the markets and resort to printing/loosening aka "screwing the common man" only when the markets do not move in the way they woud like (nominal stock prices, hitting inflation targets, aka "screwing the common man").

    Wed, 02/20/2013 - 15:39 | 3260726 Mr Lennon Hendrix
    Mr Lennon Hendrix's picture

    Tightening would mean they put some of that crap toxic MBS back on the market and put USTs back on the market when there is no demand for them.  Rates would rise and for every 1% that rates rise the bond price would drop about 14%.  This would wreck havoc on the bond markets and the US Treasury.

    Also, while this happened where would the cash flow?  To fiat?  People would want to hold cash when the money supply has doubled worldwide?  Rates would need to go above 10% to hold off inflation, and that would be a financial clusterfuck. 

    Would cash go to equity?  When earnings are dismal and people are burnt out on stocks?

    Would they go to commodities, where inflation and supply/demand is still squeezing them?

    This is why the Fed will do their damnedest to keep rates low.  How long they will is the trillion dollar question.

    Wed, 02/20/2013 - 16:22 | 3260904 Imminent Crucible
    Imminent Crucible's picture

    Buy gold and silver until you see this headline:

    "Fed to JPM: Time to repo Bear Stearns, Lehman assets"

    Wed, 02/20/2013 - 17:53 | 3261261 Karl von Bahnhof
    Karl von Bahnhof's picture

    Ergo logically when FED start to tighten gold should go up because of decreasing dollar demand.
    Another proof that markets are biased (controlled)

    Market price of monetary metal is just irrelevant now.

    Wed, 02/20/2013 - 18:32 | 3261391 sschu
    sschu's picture

    They will not raise rates as to do so would "hurt the (robust) economic recovery".  :-(

    So they have political cover for a while at least.  But nothing is going to get better soon, Bennie has already seen to that.  Jobs, GDP, etc are stuck until the market clears all the malinvetsment.  

    Four more years of this nonsense, we can write the same posts in 2016 as now.



    Wed, 02/20/2013 - 15:05 | 3260536 Jason T
    Jason T's picture

    Fuck Martin Armstrong is the man!

    Do NOT follow this link or you will be banned from the site!