Green Smoke Rising From Fed As FOMC Conclave Ends
The shorter FOMC preview: the green smoke rising from the Marriner Eccles building is not because a new Fed pope was picked. For the longer FOMC preview: here is Goldman Sachs...
Goldman Sachs does not expect any policy changes - or change in message - at the March 19-20 FOMC meeting. The committee is likely to recognize the recent improvement in the data through a modest upgrade of the outlook paragraph in its statement and its updated forecasts. But Goldman does not expect the statement or the post-statement press conference (which has been brought forward in the Fed';s new exciting communications policy to avoid market volatility) to signal increased concerns about costs and risks of QE, nor do they expect much additional clarity on what constitutes a "substantial improvement" in the labor market (as we noted yesterday). So bottom-line, more of the same...
Via Goldman Sachs,
Q: Will the FOMC announce major policy changes?
A: No, we do not expect any policy change at the March 19-20 FOMC meeting. Although the economic outlook has improved a bit since the January 30 meeting, we expect the Fed's asset purchases to continue until 2014Q3 and do not project the first rate hike until early 2016. We therefore think it is too early to signal any changes to Fed policy.
Q: Will Fed officials recognize the better data?
A: Yes, the committee will likely acknowledge the upturn in the dataflow. The modest upgrade is likely to be primarily reflected in the outlook paragraph of the FOMC statement (released at 2pm). For example, the committee could decide to replace “growth in economic activity paused in recent months” with “growth in economic activity and employment has resumed at a moderate pace.” We also anticipate a small upgrade of the committee's forecasts in the Summary of Economic Projections (SEP, also released at 2pm). Specifically, we expect that the FOMC will forecast a bit more real GDP growth in 2013 and 2014 (2.7% and 3.4% on a Q4/Q4 basis, respectively) and unemployment of 7.4%, 6.8% and 6.1% at the end of 2013, 2014 and 2015, respectively.
Q: Will the FOMC signal increased concerns about costs and risks of QE?
A: We do not expect the FOMC statement to include additional references to the costs and risks of QE. Fed communication since the January FOMC statement has increasingly focused on the costs of continued asset purchases, most notably in the January meeting minutes which revealed that "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." But the FOMC leadership has since clarified that it does not share this view. Chairman Bernanke reiterated in his Congressional testimony on February 26 that the committee will "continue purchases until it observes a substantial improvement in the outlook for the labor market." Vice Chair Yellen stated on March 4 that "at this stage, I do not see any [costs] that would cause me to advocate a curtailment of our purchase program." Costs and risks of QE are, however, likely to come up in Chairman Bernanke's post-statement press conference. We would expect him to strike a similar tone to his Congressional testimony, stressing that costs are important but that the benefits of QE continue to outweigh the costs and that it is primarily the state of the labor market that will determine the end of QE.
Q: Will Fed officials provide additional guidance on what "substantial improvement in the labor market outlook" means?
A: We do not expect the FOMC to provide more specific guidance in the FOMC statement and think that the adoption of a QE threshold is unlikely. We do, however, expect Bernanke to be asked to specify what "substantial improvement" means. Following Vice Chair Yellen's recent speech, we would expect him to stress that it is an improvement in the labor market outlook that is required which, in turn, necessitates a broad improvement in labor market indicators. In addition to declines in the unemployment rate, Vice Chair Yellen argued that she would need to see strong payroll growth, improvements in hiring and quit rates and a pickup in real GDP growth.
Q: Are participants' projections for the appropriate funds rate likely to change significantly?
A: Although some switches towards earlier hikes are conceivable, we do not expect a significant change from December's SEP (in which two participants project the first rate hike for 2013, three for 2014, 13 for 2015 and one for 2016). Given the slightly better data we think it is conceivable that one or two participants move their first rate hike from 2015 to 2014 and/or that the participant with the first rate hike in 2016 pulls this into 2015.
Q: What is left in the arsenal?
A: Chairman Bernanke might be asked what tools the FOMC could employ should the economic outlook deteriorate sharply, for example, through a re-intensification of the Euro area crisis. We would expect him to stress that the current threshold guidance already provides an automatic mechanism for additional monetary easing as the expected date for the first rate hike would automatically be pushed out if the unemployment rate was expected to decline more slowly to 6.5%. We would expect him to say that, if additional monetary accommodation was required, the first line of defense would be additional forward guidance--either through a reduction in the unemployment threshold for the first hike below 6.5% or through a longer period for QE--rather than an increase in the monthly pace of asset purchases.
Q: What are the potential surprises?
A: An increased emphasis on the costs and risks of QE would be a hawkish surprise. This would be especially true in the FOMC statement (and we think this is therefore quite unlikely). But even if Bernanke stressed the cost side of QE more than in his recent monetary policy testimony, this would be noteworthy. Secondly, a Bernanke endorsement of Chicago Fed President Evans' threshold for ending QE--if monthly payroll growth exceeded 200,000 for six months--would be a hawkish signal. As payroll growth has averaged 187,000 over the last six months, we are getting closer to this threshold and any endorsement of this rule might suggest that QE would end sooner than expected. Finally, dropping the "downside risk" phrase in the statement--motivated, for example, by the declining risks around the fiscal outlook--would clearly be a hawkish surprise. We think this is unlikely, however. We believe the fact that the committee just dropped the "significant" in that phrase at the last meeting reduces the chance of another change to this key phrase so soon after, especially because concerns around the Euro area have, if anything, risen since January 30 in light of the news out of Italy and Cyprus.
A dovish surprise would be if the committee and/or the Chairman expressed explicit skepticism about the sustainability of the recent upside surprises on growth and employment. He might articulate this either in the statement (for example, by including a reference to the fiscal drag ahead) or in the press conference (for example, by stressing the temporary positives such as the inventory boost and that the jury is still out on the effects of the tax increase on consumption). Another potential surprise would be an endorsement of Boston Fed President Rosengren's view that the committee should continue to purchase assets at least until the unemployment rate declines to 7.25%. Finally, we would look for dovish surprises in the inflation outlook, including the extent to which the committee marks down its core PCE inflation forecast and the emphasis Bernanke places on the recent deceleration in core PCE inflation in the press conference.
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Best headline ever.
The Bernank saw his shadow, so QE4EVER.
It is ALL 100% the Fed.
YTD US Monetary Base ~11% higher = YTD SPX ~11% higher.
http://research.stlouisfed.org/fred2/graph/?s[1][id]=BASE
Gotta love the smell of fiat incense.
"Smoke rises from the Mountain of Doom. The hour grows late and Bernank the Grey rides to Isengard, seeking King Obongo's counsel."
and ..honey (bo bo )liesman is telling me that they are going to tell us at exactly 2 pm......usually its 2 15 or close to it according to the man with a pig heart...but this time exactly, exactly 2......
Not all is as it seems.
See how gold and silver spot prices are reacting right now:
Live Gold Chart: http://www.pmbull.com/gold-price/
Live Silver Chart: http://www.pmbull.com/silver-price/
The cheap physical bullion premiums on those pages haven't budged either.
Be prepared for the whip-saw.
Now THAT was some funny shit Tyler. +10 on the headline. Love that thumbnail, "MOAR"!!! LMAO.
Ditto. ''Moar'', ''Green smoke''. Ay Caramba. Hilarious...
I dunno..
the smoke looks kinda brown to me.
85 bln/month in MBS & Treasury "purchases" by Bernank is sooo 2012.
Harlem Shake: Federal Reserve Stylebrown sludge
My crystal ball is showing a close at 1543 so FOMC must be a disappointment. Of couse it may need degaussing again.
Where's Dr. Evil when he's needed?
http://www.youtube.com/watch?v=jTmXHvGZiSY
The FED cannot stop printing without causing the banks (FED owners) to implode. The banks are insolvent, printing money from thin air to make them look solvent doesn't work. It just starts currency wars. All this does is postpone the inevitable, buying time for the (redacted) running the money scam time to strip as much wealth from the productive as possible.
Do you believe in recession? Did the resources disappear and did the need for these dry up? Seems as though both still exist, but something has dried up, at least for the average consumer. All this free money, but only for the (redacted) controlled banks. Get it?
Lying complicit government, we still want to know about Benghazi, Aurora and NewTown, but instead the (redacted) controlled media is feeding us more "Obama birth certificate may be a fake".
Sharing a old story
Once upon a time a man told a small village, “I will buy monkeys for $10 each.”
Since there were many monkeys in the forest, the villagers caught them and sold them to the man.
As the supply of monkeys diminished, the villagers’ efforts slowed, so the man offered them $20 each.
They renewed their efforts but the supply of monkeys diminished further, so he increased his price to $25.
Soon no one could even find a monkey in the forest.
The man increased his price to $50, but announced, “Since I must go to the city on business, I authorize my assistant to buy monkeys on my behalf.”
As soon as his boss was gone, the assistant told the villagers, “My boss has collected lots of monkeys. I’ll sell them to you for $35 and then, when he returns, you can sell them to him for $50.”
The villagers rounded up all the money they could and bought as many monkeys as possible. Then they had monkeys everywhere…
… but they never saw the man or his assistant again."
...........
And that is how they explain the stock market in india
Nice.
I love it - I can see the Bernank and Geinter selling monkeys in the forest, easily.
party like its 1999!!!!!!!!!!!!!!
The market is up solely because of the billions that the Fed pumps in every month. The unemployment rate is getting "better" solely because the labor participation rate is dropping. There's an enormous disconnect between the market and reality. What the hell can they do?
They want to say things are improving in the economy so that they don't spook people, but if unemployment "improves" too much and they're forced to back off the pedal, the market will tank. On top of that, they can never raise rates because it will make debt service unbearable.
For a bunch of Ivy League Ph.D. brainiacs, they sure seem to be winging it at this point. Any deviation from their present course would reveal the entire notion of a "recovery" to be a fraud, so they won't deviate. This is all about saving face and helping the most well-connected to steal everything possible before the whole shithouse goes up in flames.
Best headline ever.
Really...It works on so many levels. Prognostications from the belly of the beast.
Which one? Two Horned? Or Seven Heads and Ten Horns? Or?
Print!!!!!!!!!!!!!
Green smoke? Wah...? http://www.mypokecard.com/en/Gallery/my/galery/mkLAKmH7pDqf.jpg
Here comes your wealth effect.
Fed's asset purchases to continue until 20,140Q3.
C'mon Goldie get the numbers right.
quick sell all your gold.
OT - what's up with the Christine Lagarde raid?
That headline alone should win a Pulitzer!
here is their logo.. http://www.ecigs-coupon-codes.com/wp-content/uploads/2012/10/greensmoke-...
Same old FED DOPE
As a devout Catholic, this is THE FUNNIEST THING THAT I'VE EVER SEEN ON THIS SITE! I actually snorted coffee through my nose when I read the title. You guys are over the top. +1000
It's just unfortunate that our world is moving towards the precipice and there's not a #uckin thing we can do about it...
So, if you're a "devout catholic", why are you worried? Isn't it all going to be heaven where you're going?
lol harsh. funny but harsh.
"worried" is, and should be your word, not mine...
If youare a devout Catholic as you say, you should realize that the assinine comments by church hating bigots like that dumbass are just a foretaste of what will come when these shit-throwing apes take over for a few years. They will revel in our demise and the fucking limits will disapear.
Then we will see what these evil pieces of shit are really like.
So keep your head down and have a fall back position ready prior to.
Things are no where near as bad as they are going to get for Catholics in this country.
Thanks for your support. I'm already seeing blatant antiCatholic sentiments in my social network, on Facebook and Twitter. Catholic, and Christian hatred in general is rising. 50 years ago, it was freeemasons and orangemen, today their kids have ejected Christ and have adopted an atheistic, selfish view.
I'm prepared and by the way, Pope Francis was not a mistake. He's a man for our times, as we'll see.
Looked to me just like a guy making a joke. Probably in bad taste but evil piece of shit seems a bit overboard don't ya think?
Catholics have little to worry about imo...... I find it much more likely that a wealth based ( or lack thereof ) basis for contention should arise, rather than religious.
Yeah, the guy was making a joke similar to the dehumanizing jokes people used to make about blacks.
Using humor to hide a malicious purpose is a long tool of the propagandist, and in this case it is part of a perpeperation for far worse, so yeah, I say it is evil.
And the wealth divide pretty much mirrors the gennuine Biblical Christianity divide in this country. Though 'Catholic' Pelosi and Biden will never have to fear getting raided and their children taken away for the 'abuse' of teaching them a moral world view based in biblical Christianity. To them and many others, Catholicism is more about their ethnic culture than anything meaningful in its own right.
Academics at the university level are openly dismissive and contemptuous of any Christian that truly attempts to live by the morality of the New Testament. They are firing the broilers of hatred for Biblical Christians more every year and most Christians have no idea.
Too touchy man.
Look, I'm a white guy. Call me a cracker, PWT, or a peckerwood see if I give one iota of a shit about it.
Talk shit about Catholics , Jews , Muslims , or freaking Voodoo worshipers who cares. As long as I get to worship what I want and how I want to , talk all you want.
Speech is free, bring it on. I'm secure. My response might be, "go fuck yourself", but I sustain no damage personally. I may feel the issuer of such an insult might be a fuckin' idiot , but as far as calling them evil and / or damned / whatever ...... man I have no idea on that. That's something for the man upstairs to decide.
Lay hands on me and then we've got business.
Words only have the power that you give 'em.
I'm not blastin' ya pal, I'm just giving out some food for thought. Take what you will and toss the rest.
Xtop, plenty of people took that attitude in the 20th century and many of those groups were Armenians in Turkey, Jews in Germany, Gypsys just about anywhere in Europe, and Kulaks in Soviet Union Ukraine.
Being a tough guy and not let it bother you could be a cocooning salve, but then again, it might just be the equivalent of the proverbial ostrich's head in the sand.
When people dehumanize another group, you can ignore them, and you can laugh it off.
But if the shit gets worse and worse over decades, you are a fool to continue to ignore it.
What a stupid question.
By your feeble grasp of Catholic principles, Catholics everywhere should just kill themselves and head to Heaven right now,.... you stupid shit.
Actually, I'll settle for just one.
PS: You ARE Catholic, aren't you?
I think I am transitioning on the way out.
The leaders of the Catholic church appear to be a bunch of cunts these days, and I am getting more inclined to start busting some heads.
Hope to run into you some day, bitch.
Religion is a scam, made by man for man. I do not believe in religion, it is a farce, a lie and the GREATEST CAUSE OF PREDJUDICE. Spirituality is real, god is life, satan is the spirit of evil born to all men's souls, the soul is mass consciousness of the locality.
"When one person suffers from a delusion it is called 'insanity'. When many people suffer from a delusion it is called 'religion.'"
-- Robert Pirsig
Religion is not a scam. It is the product of communities across the globe trusting in their moral leaders.
The biggest scammers and murderers in the hisotry of mankind have been secularists who talk people into becoming wards of the state and then murdered to cull the herd for various reason in order to manage ever dwindling resources.
The laws the secularists use to justify this deciet and murder are irrelevant tools used to give cover to their degenerate, greedy, power mongering purposes.
FACT; public school teachers have molested hundreds of times more children in the last twenty years than have Catholic priests.
Had you said what you said to Samuel Adams he would have kicked your ass, fraud.
I laugh at you religionists, particularly you rigidly dogmatic, astronomically hypocritical Bible-thumping organized religionists with your mega-churches and their ever-present collection plates, rightly decrying the scams of fiat currency and central banking while you blindly and irrationally continue to buy into the even older scam of the paternalistic and all-seeing sky demon who will reward you in the supposed afterlife by making you suffer during your one and only real life here on earth --- all, of course, without the faintest shred of evidence or proof. It is really a remarkable commentary on the fundamental insanity of the human race.
Ah, so your one of the inbred fucktards that cant be bothered with a conscience.
Good to know, dumbass.
I am willing to bet that I have far more of a conscience than some self-righteous latter-day Pharisee.
If your angry, bitter, intolerant, ignorant, reality-denying blatherings are representative of the actual teachings of your Christ, then I am Napoleon Bonaparte.
So, if you're a "devout catholic", why are you worried?
Its the LONG stay in Purgatory first, when your descendants are too cheap
to buy your way out.
"Greensmoke rising"
lol
Maybe they're cremating old 'Alien Greenspan' himself...?
Knowing this crowd, they might have served his slow-roasted carcass for lunch.