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Yellen's Fed Tightens ($10bn Taper) And Loosens (Lower For Even Longer); Blames Weather - Full Statement Redline
As expected Janet Yellen's first FOMC statement showed another $10bn taper (more tightening according to Jim Bullard) but the wordy shift from quantitative thresholds to "we'll know it when we see it" qualitative guidance is relatively dovish (despite improved economic outlooks):
- FOMC SEES `SUFFICIENT UNDERLYING STRENGTH' IN ECONOMY
- FOMC SAYS IT WILL LIKELY REDUCE QE IN `FURTHER MEASURED STEPS'
- FED: LOW TARGET RATE APPROPRIATE FOR CONSIDERABLE TIME POST-QE
- MORE FED OFFICIALS SEE AT LEAST 1% FED FUNDS RATE END OF 2015
Most importantly perhaps, if expected, forward guidance is now dead, as it is a confirmed failure:
- FED DROPS 6.5% JOBLESS THRESHOLD FOR RAISING FED FUNDS RATE
While Bernanke's last meeting appeared full of disagreement; this time less so (as Plosser and Fisher appeared not to dissent). Full redline to follow.
Pre-FOMC: S&P Futs: 1873.5, Gold $1337, 10Y 2.712%, USDJPY 101.65
The hand-waving begins:
- FOMC TO WEIGH `WIDE RANGE OF INFORMATION' ON JOBS, INFLATION
As they lower growth outlook and lower unemployment outlook?!
- FED: 2014 GDP GROWTH OF 2.8%-3.0% VS 2.8%-3.2% IN DECEMBER (lower growth)
- FED: END-2014 JOBLESS RATE AT 6.1%-6.3% VS 6.3%-6.6% IN DEC. (but lower unemployment)
Full statement redline below
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And who did not see this coming?
This is what is coming...... In two minutes....... https://www.youtube.com/watch?v=1oZx8XD9U8s
<---- Taper is tightening
<---- Tapering is still a loose policy
ANOTHER FED paper-GOLD SMASH SMASHSMASHSMASH...
Broadcast: """ ALL IS FINE!!! """
I love it. I wish they'd smash it all the way down to $900 because I have fiat and I have a truck. Bring it, central planning bitches. I'm ready.
Tapering is still a loose policy and a loose policy is always a desperate attempt. Desperate attempts create desperate measures and when taken they usually fail.
Gold demand has soared since Brown's Bottom and continues to climb. The supply is not increasing drastically, and any utopian theory that thinks we will be mining asteroids in the coming decades needs their brain checked.
.
i almost died laughing watching that
Good news for Belgium!! Now they can buy more treasureies at this great rate!
Kneel before ZIRP.
Did ZIRP kick even Zod's ass?
FED: "ZIRP forever!" Bond market: Fuck you!
The actual Federal Reserve is located in Belgium. Why did Bernanke leave and let a woman run the outlet in DC?
I maintain that we won't see talk of untapering until either the Sep or Dec FOMC meetings. We've got to see how bad the housing market gets this spring/summer. And maybe let the markets crash a little bit. Just to see how it feels.
Just the tip to see how it feels:
http://www.youtube.com/watch?v=1tgS1n7DQbY
But aren't they already talking about it? Perhaps you meant that it [action] couldn't actually happen before September? (and good reasoning there)
Party on Garth!
"we still have no clue what we're doing, so we print money and lie monthly"
Print and Lie.....oh THAT'S what P&L stands for!
And they all buy up the USD like crazy - against PMs and other currencies too. What a horror show
Just because the instinct of the masses is to sell gold when their investment bankers tell them to, because their firms have sell ratings on them, and buy dollars - what is still the reserve currency - doesn't mean it is a wise long term move. The fact that no trader wants his clients to own gold, because the trader doesn't get a bonus from selling off the firms buy list, shows how rampant they will sell when the client says, "Fine, sell the gold."
How many people have tried to buy "gold" - paper as it is - through a financial advisor? They just won't do it, or they will make a note that it was their client's idea. Then they finally convince the client to sell, and they will try to get you to sell the GLD because, "Gold is a bad investment....my firm recommends against it....and we could buy CVX! They are about to take over the Ukrainian pipeline!"
Until debt service exceeds tax revenue, nothing will change.
The 10 year is looking to take care of that real soon...anyone questioning why the 10 Year has been defended from crossing 3% only need to look at the suddenly wealthy nation of Belgium...they are probably repoing trash back to the Fed so that they can buy hand over fist but now we know a few things:
1) Nations are less willing to purchase our debt
2) The Fed is cutting secret deals to hand cash to foreign banks to make up the difference
3) Russia is not puchasing any more of our debt likely
4) There will be no 2015 rate rise they cannot afford to stop QE let alone raise rates.
And what happens if Russia and China start dumping en masse? Who's gonna pick up the slack? Not even the Fed can print enough and we are going to pretend we have an option in Ukraine? The U.S. will do nothing Putin will have the whole nation within 2 years and as this point China probably knows they can have Sennuku Islands...fuck it maybe even Taiwan..
AND THIS IS THE INHERENT DANGER WHEN YOU MORTGAGE YOUR NATIONS FUTURE..NO FINANCIAL LEVERAGE.
This year is going to be a sight to see..I mean a sight to see.
LOLOLOL! Vertical DOWN in stocks.
(Now let us see how long that lasts. Fucking HFTs.)
Less than a minute?
Nope..spoke too soon...
There's a reason why I wouldn't play in the stock market with anything that I couldn't afford to lose.
I'm not an insider.
Oh, so youre not Jewish
Stocks not allowed to go down while Janet speaks. So maybe another 45 minutes of wishy washy action before blast off.
http://media.cagle.com/83/2013/10/14/138754_600.jpg
THE WIZARD HAS SPOKEN....
NOW SELL ALL UR REAL MONEY...
not....goin to my dealer later this afernoon.....
keep stackin.....
Spells austerity for those relying on a fixed income for their survival.
What major retailer is going bankrupt next?
Central bank shareholders say, ME SO HORNEY, SUCK E SUCK E YOU LONG TIME.
http://www.youtube.com/watch?v=JEEWE7gcPw0
This bullshit is simply disgusting. Who dumped the 105 Billion in Traesuries last week Yellen and why?
Seriously, I want off this planet!
You missed your flight, MAL 370
Indefinite layover at Diego Garcia.
Well, I failed to make the first cut on Mars One. Best of luck to you if you decide to apply.
Miffed;-)
Re: Well, I failed to make the first cut on Mars One
Let me guess... Too pessimistic? Not a team player?
Stocks down momentarily.... BTFD.
stocks will reverse. gold not so much...
I should have said BTFD right this second!
I can not remember how many times this poster or that commented that once the 6.5 % unemployment threshold was met it would just be changed since it never mattered.
These skimmers will never give up their vig.
ahhh, there is the smash in metals I knew was coming!
(more tightening according to Jim Bullard)
Translated Belgian Waffle kicksave again.
They never tighten. They just stop admitting what they are doing.
ZIRP4EVA&EVA
so zirp forever ever ever has yields moving higher...
not for everyone, but for some, yes.
It really is different this time.
Well between the Crimea situation being "resolved", and now the "economy" and "tapering" has been sorted out, fixed or whatever you want to call it, it's been one hell of a week for gold and the mining stocks. Can we call it a week and start again on Monday? Please?
Russia and China demanding higher rates or risk a dump. Its tough when your broke.
http://www.youtube.com/watch?v=JEEWE7gcPw0
WELCOME TO AMERICA.
SEND GRANDMA OUT TO WORK THE STREETS.
<-- Less overt QE [means] -->
<-- Moar stealth QE
Russia invades Ukraine. Blames Weather.
go king dollar go!
The dollar chart looks like a Teenager's Stiffy, when watching porn for the first time. Impressive...most impressive
The most frustrating thing is knowing what the outcome is, knowing the best way to hedge yourself, and being powerless to affect the eventual outcome. I do wish at times I hadn't gone down the rabbit hole and saw this disgusting fubar'd situation for what it is.
Ditto. My monicker should be "Ignorance was bliss"
This is my daily dilemma. The funny thing is I look around and think, damn, I am relatively better prepared than 95% of people in my life. Then I realize when this tsunami hits, really, I am going to be squashed like a bug. I'm a burly muscle bound ant that still will have sand kicked in my face. I do envy the ignorant at times.
Miffed;-)
Yeah, I know perfectly well what you're saying.
I suppose, however, that the consolation will be that we'll at least know where to face in order to see the fireworks (bright flash).
I am heading toward Miramar or North Island Naval Air Station on that day. I want my ashes to be elevated to the stratosphere.
Want a friend for company? I'm fairly close and wouldn't mind surrounding myself with a few of the like minded and prophetic. Too bad we didn't have the power. ;-)
Miffed;-)
Meet the new boss...
Yellen's Pants Tighten!
FUPA is more pronounced.
Valuable paper up! Worthless metal down!
I think the force is stronger in this one... When the Yellen speaks fixed metal markets move very much.
Just bought some more gold.....gotta love it....dovish...but going down...Ill take it
Gold getting rocked...it's still 55 billion a month free money. I dont see the market reacting to the red for long.
No need for Jack Yellen to waddle out and say anything. Everyone knows well in advance what will be spewed.
Market drops in minutes. Ramp-pa-palooza follows.
Check that gold price. OUCH!!!!
Ms Yellen, where is Belgium getting the money to buy its GDP in US Tresuries in 2 months? Taper my ass.
"The Lord Giveth and the Lord Taketh away"
Read that in a piece of old literature at some point in my life... just take it for what it's worth. It sure fits the current occupation and exploitation by our central bankers.
They act like Gods because we let them rule over us with their confetti.
They can wipe out 30 days of slow solid gains on 2.5 days. I guess if no one myself included is willing to do anything about it, then there is no longer a reason to buy and hold gold. It's a hamster wheel and we are going nowhere except a year closer to the grave. I'm done with this. No more words for me I'm removing myself from The Fight Club. Perhaps if history is any indicator, me no longer posting and perhaps no longer even reading ZH, will be the turning point, we are waiting to happen. If so, no credit due is needed. Bye Bye.
Fuck You Greenspan. Fuck You Bernanke. Fuck You Yellen.
We are only halfway through the lost decade which started in 2010. I'm sure by 2020 it will be the greatest economy ever.
Re; I'm sure by 2020 it will be the greatest economy ever.
For the top 10%, you have no idea. There's a reason the airlines are adding first-class seating, lounges, and airport access.
It's a fiat bankers and oligarch's wet dream come true.
Re: me no longer posting and perhaps no longer even reading ZH
Well, good luck. You'll probably be happier (mentally healthier) not reading this site.
Having economic moral OCD is a bitch, hope you can kick the habit.
Sharp selloff... Everyone is going cash, look at the ramp at 2PM
http://www.marketwatch.com/investing/index/DXY
http://www.youtube.com/watch?v=SbyAZQ45uww&feature=kp
JANET YELLEN TESTIFIES!
tells congress it's only going to get worse before it gets better.
no shit. you need an ivy education to figure that out?
run.
Moar yellen, moar tapering, higher markets, the new credo.
The fed can continue to taper as long as the US has suspended its debt ceiling. Who knows how many billions are being given to " allies" to ensure they buy US Treasuries thus freeing up the fed from having to support the loss. I would imagine if he US set a debt ceiling again the fed might find a reason to add to the QE. Just a thought... I might be wrong.... Probably am we all know how smart the fed is, Im sure they know what they are doing.;/
Yep, see Belgium's US Treasury holdings.
Dow has already bounced 60 points of that move down, now for the ATH close
What a bunch of BS!
Fed's top Ivy League economists have a startling revelation that maybe the unemployment rate doesn't represent an accurate measure so they can no longer base decision on that alone. How have jack ass holier than thou geniuses determined unemployment formula that they put in place two years ago has now become unreliable? It was fine two years ago, but now it is not? Clueless pieces of dung running monetary policy by the seat of their pants
One reason for dropping a threshold unemployment rate, as Yellen among others have noted, is that the rate can overstate the job market's health. In recent months, for example, the unemployment rate has fallen not so much because of robust hiring but because many people without a job have stopped looking for one. Once people stop looking for a job, they're no longer counted as unemployed, and the rate can fall as a result.
As many have said we all saw this coming, everyone except the geniuses at the FED. Isnt the fact that people less people are working and the unemployment rate going down because everyone is independently wealthy and retiring? Isnt that what all the asshats have been saying for two years? How can anyone take anything said by 90% of the entire industry seriously. The industries mouth pieces are so bad its like porn actors trying to do Shakespeare.
See my comment below. Their desire to print more money never had anything to do with lowering unemployment. It's just that the FED has now aligned its preference with the government's to try and throw more bullshit at the public as to how fucked up the economy actually is. The result of this decision will be to simply keep the numbers released by the BLS absurdly low even when the actual inflation and unemployment start to go significantly higher. Every incentive is aligned that way.
Apparently within 6 months the FED will tapper to 0, but remember tapering is only bad for gold.
Is dropping the unemployment rate as a trigger for interest rates a signal that the Fed is now abandoning part of its dual mandate?
No, of course not.
1) Protect the banks
2) Enrich the Elysium Class.
Still a duel mandate.
THE GOVERNMENT IS IN TOTAL CONTROL OF MARKETS IN AMERICA.
TRUE VALUE HAS BECOME A NATIONAL SECURITY THREAT.
moving from market manipulation to absolute control.
Just remember, world wide economic collapses aren't frozen chimichangas that are cooked in a microwave in 2 minutes. Patients grasshoppers.
In other words, they still encourage the government to fudge the inflation rate lower, and they no longer encourage them NOT to fudge the unemployment rate lower. So now the government has absolutely every reason to fudge them all lower and no reason not to.
Is Yellen actually sayin the FED's ability to act as buyer of last resort for treas issuance is comin to an end.
Don't read too much into it. There is no alternative. How many USTs have you bought lately?
Fudgedy fudge fuck
We'll always have Belgium.
there's a lot here, but I have a question for you smart ZHers who have studied Keynes et al in more depth.
What, precisely, does the Fed think it's actions are or could do, causally, however far up the causal chain, to create jobs, i.e. to get the country to "maximum employment" - whatever that actually means.
I recall "trickle down economics" being lambasted by the same people who love moar taxes, moar printing, and moar borrowing... but I'm genuinely unsure how different this really is.
Perhaps the Left hates the notion of capital "trickling down" from the very wealthy, the "job creators" but somehow, when it's the government, or private banks, benefitting from cheap FRNs the poors can not obtain anywhere near as cheaply, it's suddenly okay? It suddenly works?
I mean, isn't this a case of "it's not wrong/stupid/racist/insane/fascism when we do it"? What am I missing. Are economists quite sure Fed actions fairly reliably affect employment in the ways they propose and predict? The evidence need not be perfect, but something like how we'd expect a new drug to work after proper testing and vetting... i.e. if the Fed does x, y, and z to improve employment, employment should, at a minimum, not worsen, and if it does, there ought to be clear evidence it would have worsened more but for x, y, z - not conjecture.
Because, if Fed action isn't reasonably causally related to employment or prices, then as an empirical matter there is no way to say they are doing anything but affecting bond and equity and perhaps other markets with their dispatches, and for all we know their meddling is literally doing more harm than good.
Why aren't "progressives" in favor of say, giving everyone at or below poverty level a freshly printed $5,000 bucks, let them spend it, and let it "trickle up"? Presumably a lot of that would go to credit card companies, but a lot would go to auto shops, clothing stores, nail salons... local businesses who would either spend it forward or deposit it themselves, some to smaller/local banks who don't have access to the fed free money window, but who have clean books and reasonable capital reserves, etc. etc.
Sorry this is meandering, I'm just having this overwhelming sense, from our global politics to our national economy, that I am in some sort of bizarre dream where we have all accepted horseshit as fact, and I can't see why central planning, or political centralization has gotten to the point it has, given the record.