This page has been archived and commenting is disabled.
Hilsenrath Sets New World Record For Annotating FOMC Minutes
In 4 minutes (and really under 1 minute when the summary headlines hit), WSJ's Jon Hilsenrath managed to parse the 25-page and considerably more diverse of opinion FOMC Minutes into a bite-sized 535 words summarizing the key sections. His conclusion, as we noted previously, despite the various members' angst, they still want to start winding down QE this year and end it next year. It would appear that his 'translation' of the minutes for the investing public offers little hope for moar QE anytime soon - even if fiscal drags are sustained. We are confident neither Hilsenrath, nor anyone else in the legacy media, ever breache[s|d] s the FOMC embargo when they receive the minutes ahead of general release for broader preparation: after all, in a time when everyone is suddenly concerned with the Fed leaking data in advance, that would just be uncivilized.
Redefining "real-time economics"
Via Jon Hilsenrath of The Wall Street Journal,
Federal Reserve officials struggled with a decision to press forward with their $85 billion-per-month bond-buying program at their Sept. 17-18 policy meeting, minutes of the meeting showed. Officials understood that many market participants were expecting them to pull the program back, but they worried that the economic data weren’t living up to expectations, that threats loomed in financial markets and in Washington fiscal policy and that they might unsettle matters even more if they started to wind down the program in the face of such uncertainty.
Despite their angst, many officials still want to start winding down the program this year and end it next year.
Below are key passages from the minutes:
WHAT HELD THE FED BACK AT ITS LAST MEETING? ONE FACTOR WAS RISKS ON THE HORIZON:
“Questions were raised about the effects on the housing sector and on the broader economy of the tightening in financial conditions in recent months, as well as about the considerable risks surrounding fiscal policy.”
FED OFFICIALS WORRIED THEY MIGHT SPARK EVEN TIGHTER FINANCIAL CONDITIONS IF THEY ACTED. A KEY PHRASE BELOW IS ‘RISK MANAGEMENT,’ I.E. THEY WANTED TO AVOID TAKING RISKS AT AN UNCERTAIN MOMENT:
“The announcement of a reduction in asset purchases at this meeting might trigger an additional, unwarranted tightening of financial conditions, perhaps because markets would read such an announcement as signaling the Committee’s willingness, notwithstanding mixed recent data, to take an initial step toward exit from its highly accommodative policy. As a result of such concerns, a number of participants thought that risk-management considerations called for a cautious approach and that, in light of the ambiguous cast of recent readings on the economy, it would be prudent to await further evidence of progress before reducing the pace of asset purchases.”
OFFICIALS WERE VERY WORRIED ABOUT HOW MARKETS WOULD TAKE A DECISION NOT TO ACT:
“With many outside observers expecting a decision to reduce purchases at this meeting, some participants emphasized a need to clearly communicate the rationale behind any decision not to do so, in order to avoid conveying a message of pessimism regarding the economic outlook or to reinforce the distinction between decisions concerning the pace of purchases and those concerning the federal funds rate.”
MORE WORRIES ABOUT THE FED’S COMMUNICATIONS:
“In light of the mixed data recently, including inflation readings that remained below the Committee’s longer-run objective, and the concerns over near-term fiscal uncertainties, some members indicated that they preferred to await more evidence that their expectation of continuing improvement would be realized. But with financial markets appearing to expect a reduction in purchases at this meeting, concerns were raised about the effectiveness of FOMC communications if the Committee did not take that step.”
IT WAS A CLOSE CALL:
“The various considerations made the decision to maintain an unchanged pace of asset purchases at this meeting a relatively close call.”
BUT MOST OFFICIALS STILL WANT TO WIND THE PROGRAM DOWN BY NEXT YEAR, ACCORDING TO PROJECTIONS THEY SUBMITTED BEFORE THE MEETING THAT WERE PUBLISHED WITH THE MINUTES:
“Most participants judged that it would likely be appropriate to begin to reduce the pace of the Committee’s purchases of longer-term securities this year and to conclude purchases in the middle of 2014.”
»
- 8244 reads
- Printer-friendly version
- Send to friend
- advertisements -
Let's see if the algos read Hilse...
Algo's write the news now.
http://mashable.com/2010/07/09/robots-news/
Peter Schiff: Forget what the Fed SAYS - watch what they DO.
http://www.youtube.com/watch?v=Tak9ODlBJgM
Torn on tapering? Sounds like one painful asshole to me.
Did you not know?
He graduated Magna Cum Laude from Evelyn Wood's.
http://www.amazon.com/Evelyn-Seven-Day-Reading-Learning-Program/dp/1566194024
C'mon Tyler! take the speed reading and writing course. It's free and called pre.releases to selected friends.
queue Peggy Lee...is that all there is...
everything so corrupted ... the sad part none seems to care.
all the signs of a crumbling empire ...
Of course it's not uncivilized to let your family and friends know in advance. It's all Bullshit!!!
Hilsenrath holds another record for most cocks up the same ass.
Ouch, that hurts. Figuratively and literally
Kevin Henry was the cock that gave Jon the record.
ya think he actually wrote it or just endorsed a pre scripted Jawbone?
Now because we all know that stopping QE by mid-2014 is utterly impossible, and because we all know that mid-2014 is not that far away, is it reasonable to assume that perhaps the system isn't intended to last longer than another 9 months or so?
Interested in hearing from some Fed historians here. Did these guys always just make shit up on the fly and then when their predictions turn out less reliable than a failed newsletter writer, they just shrug and make more absurd predictions?
Was there ever a "credible" Fed?
the real question is are the rest of the people in this world holding dollars going to stand by and watch its value diminish daily?
As long as they can buy stuff with it at a discount price, sure. Once the gold and silver runs out, maybe not so much.
This might be worth reading.
http://www.cato.org/sites/cato.org/files/serials/files/cato-journal/2010...
So condensing 25 pages => 535 words in 1 minute (or even 4) is not blatant proof of illegal activity what does it take to bring these gangsters to justice?
Has anyone ever ASKED John how he does it? You know.... somebody who asks probing questions in an attempt to understand the facts of a situation to report them to others in the pursiuit of widespread understanding of a subject matter?
Somebody like..... I don't know...... maybe a JOURNALIST?
(As a side note- I hear John's wife complains to all her friends about John's premature ejaculation problem. "He's just so freaking fast I never have any fun!")
She also complains that he screams BEN each time he shoots his juice in her cornhole.
nodebt
has anyone ever asked john how he does it?
he's clairvoyant.
As the Tylers are probably aware, certain financial reporters are given access to the Minutes approximately 45 minutes prior to announcement. This is done in an "Isolation Room" at the Feds around the country so they can read said documents and parse the data, put together their stories and speak intelligently (sic) on the documents.
Now I ain't sayin Hillsey ain't the Bernanks mouthpiece, just sayin that's how it's done for these reports.
Oh, come on. Now you're just taking all the fun out of it. Why deal with facts when a good conspriacy theory is so much more entertaining?
Quit trying to lend any kind of air of legitimacy to this donkeyshow; I care less about Jon-Boy getting a peek so he can conjugate in time for press than I do about the people putting on positions before the announcement that happen to have been prescient in "hindsight".
According to CIBC World Markets:
https://app.box.com/s/1hz07yh07pze8p6awmhi
Enter Yellen: What a New Fed Chair Could Mean for Policy
The nomination of Janet Yellen as Fed Chair, to be announced today according to the White House, and likely to be approved early in 2014, does not usher in a new era of more dovish policy for the Fed as some in markets may fear. Yellen’s FOMC voting record has matched Bernanke’s and her speeches have largely echoed the themes of her predecessor. Bonds may see a temporary boost on the appointment of Yellen to the helm (pending Senate confirmation), given her support of the Fed’s overall dovish stance. However, assuming an amicable passing of the current debt ceiling and budgetary deadlock, we see longer-term risks of a sell-off as the drag from fiscal policy eases in 2014, giving even a Yellen-led Fed justification to scale back bond-buying by early next year.
Profile: Vice Chair of the Federal Reserve, formerly Chair of the White House Council of Economic Advisers under Clinton and President of the Federal Reserve Bank of San Francisco.
No Perma-Dove: A look at Yellen’s speeches may lead some to believe that the next Fed Chair is a staunch monetary policy dove. Her emphasis on the destructive nature of long-term unemployment and the cyclical drivers of higher joblessness has highlighted the need for continued easy policy. She has also stated that the Fed’s growing balance sheet is not a roadblock to an eventual smooth exit from QE, and that there is no evidence that asset
purchases are harming financial market functioning. And as Chair the FOMC Subcommittee on Communications, she has been a driving force in formulating tools, including threshold guidance, which have been used to reinforce the Fed’s easing.
But Yellen is no easy-money ideologue. With the Fed facing the greatest downturn since the Great Depression, Yellen’s dovish views and speeches have simply hewn closely to the Fed’s overall dovish stance. A look at her voting record shows votes cast in line with the FOMC majority, including Ben Bernanke, with not a single dovish dissent since the onset of the crisis. Her lack of concern about inflation has been vindicated by the facts, with annual CPI trending below the 2% mark. And she hasn’t always been the voice for more monetary policy accommodation on the Fed. There have been episodes in her career when she has taken a more hawkish tilt, including the May 1996 FOMC meeting where she pointed to the “…need to be nervous about rising inflation”, later that year describing labour markets as “undeniably tight”.
Yellen’s Preferred Employment Indicators: One factor explaining Yellen’s support of the Fed’s easy policy is the continued stagnation in the jobs market. In a March 2013 speech, Janet Yellen identified her preferred indicators for gauging whether there has been a substantial improvement in the labour market outlook justifying a tapering in Quantitative Easing.
- Hiring as a share of employment (Chart 1, left)
- Job quits as a share of employment (Chart 1, right)
- Nonfarm payrolls (Chart 2, left)
- The pace of spending growth (Chart 2, right)
Only the quit rate, which could signal that workers are more optimistic about finding new jobs, has been trending stronger in recent months, with the remaining measures of job market health either flat-lining or softening relative to earlier in the year. So rather than a hawkish/dovish ideological slant, the cold hard fact that the US jobs market has yet to show signs of measurable improvement is likely the key factor motivating Yellen’s support for continued QE bond buying.
For now, fiscal uncertainty continues to cloud the outlook for US economic growth. But if policymakers in Washington are able to extend the debt ceiling and agree on a fiscal deal without new cuts to 2014 spending, an easing fiscal drag could see a 3%-plus pace of US growth next year. That substantial improvement in the outlook for economic activity and hiring could see the Fed begin to scale back the pace of its asset purchases by early 2014, to the surprise of many in markets who may be erroneously expecting more caution from a Yellen-led Fed.
Perhaps someone would like to link an article where a CIBC or BMO organization reacted to a new Fed chair appointment with "HOLEY SHIT are you fucking kidding me? That one will destroy us all! GET OUT WHILE YOU CAN!!!"
And now Ole Yellen's in charge - Ole Yellen, who, by her own admission never saw any indication of problems brewing heading into the 2008 meltdown. Sounds like a recipe for good times and stability all around.
Don't worry Al, the MSM narrative is already being changed so that she did see it and was one of the only ones on top of that.
We are in good hands.
Now go hose out your pussy Hilsenrath!
Khggyghg. Hugh h VHS fg VHS. VHS. DC ihcckottehb vv gfghxgbb. He go. Nj k. Hon. He kn n fdfjjjc Nissan bi. Colin s. gfvhoiee. Herb choice yes. Shock bomb. Cdsthbkoh. Was. Indian. Of stuck. Fdfjjjc. HHFA. Jovvddfvn. X. Behind Ben I Ben nib knife. Sank bloc. Swim puff. IOC bbgk veggie.
Leave Jon Alone !!! I just randomly typed those words and looked what I was able to put together in under 60 seconds. Quite amazing.
Best line EVAH:
"Her lack of concern about inflation has been vindicated by the facts, with annual CPI trending below the 2% mark".**
**Provided you don't ever feel the need to buy food or gasoline.
Interpretation is prologue to the document.
Timing is everything, lest the thinking gets off-track, officially.
BULLLSHIT
According to BMO Capital Markets:
Yellen Gets The Nod….Business As Usual
Bottom Line: It should be business as usual under new Chair Janet Yellen in 2014, with the Fed focused on returning the economy to full health. When the time comes to mop up the stimulus, however, we would expect her to be as equally determined to restrain inflation as Bernanke would have been.
The President’s nomination of Vice Chair Janet Yellen as head of the Fed was widely anticipated, and there was only a muted market response. She is widely expected to pass the Senate’s confirmation hearings, allowing her to step into Bernanke’s shoes on February 1. The news removes one source of uncertainty for investors buffeted by the fiscal impasse. Though sporting dovish credentials, Yellen is considered a pragmatic policy maker with an above average record in forecasting the economy. This should come in handy during these particularly uncertain times. Brian Belski, our Chief Investment Strategist, believes the Yellen appointment will be viewed as a seamless transition, one that should provide stability to equity markets.
While Yellen hasn’t spoken publicly about policy in months, it is widely believed she is still a strong supporter of the Fed’s QE program and forward guidance. The unprecedented stimulus is aimed at keeping long-term rates down until the economy strengthens and is closer to full employment, provided that inflation doesn’t rise much above the 2% target. Like Bernanke, her near-term focus is to reduce unemployment. However, this doesn’t preclude slowing asset purchases as the economy strengthens. Assuming the fiscal impasse ends in the next couple of weeks, we still lean towards a December tapering. (Bernanke will chair one more meeting after that on January 28/29.) Still, the Fed is unlikely to stop purchasing assets until next summer and probably won’t begin raising the funds rate until the second half of 2015.
We don’t believe Yellen’s dovish reputation is entirely deserved. She led the push to establish an inflation target in 2011. Her support for aggressive stimulus in recent years was likely warranted by the economy’s lackluster performance since emerging from the Great Recession, and by the equally subdued behavior of inflation. In other words, being “dovish” in the past four years has been the same as being “right”. When the economy eventually normalizes, she will likely refocus her attention on defending both sides of the Fed’s mandate of full employment and low inflation. As a supporter of open communication and transparency, Yellen will need to “lean toward the center” as a leader, to ensure that a solid majority of the other 18 policy makers support her views. This will be especially important when the time is ripe to unwind the unprecedented stimulus, as underscored by the rout in Treasuries ahead of the September meeting amid growing expectations of a mere slowing in stimulus.
Should the fiscal impasse continue and lead to prolonged economic disruptions, the new Chair may consider different tactics to offset the shock. This might include lowering the unemployment rate threshold that would trigger a potential rate hike (currently at 6.5%), or establishing an inflation threshold that would preclude tightening so long as inflation remained below it. Although expanding the size of asset purchases (from the current $85 billion monthly rate) could also be considered, this option seems to be losing favor, even among several Governors on the Federal Open Market Committee who are worried about longer-term risks to inflation and financial stability.
As one of the few policymakers to ring the alarm bells before the 2008 financial crisis, Yellen will likely take the Fed’s expanded regulatory role to heart. The last thing she wants is a credit crisis/asset bubble under her watch.
If they really want to create inflation all they have to do is fund an income tax cut. Dead easy. But they haven't so maybe they don't, yet..
"...they still want to start winding down QE this year and end it next year..."
There is often a difference between "want to" and "actually will".
they still want to start winding down QE this year and end it next year.
Wanting and doing are two distictively differnet things.
An ignorant question: Aren't reporters allowed to write their notes during the embargo? Not sure.