Fed Tapers $10 Billion, Says Economy, Consumer Demand "Picked Up"

Tyler Durden's picture

Despite dismal data (or the potential for great escape velocity is around the corner data), major event risks, and a Treasury market that just won't buy the dream of recovery that they are selling; the Fed stuck to its tapering guns... with a consensus $10bn taper...

  • *FED TAPERS BOND BUYING TO $45 BLN MONTHLY PACE FROM $55 BLN
  • *FED: ECONOMY PICKED UP, CONSUMER DEMAND RISING `MORE QUICKLY'

Shifting from "the economy slowed due to weather..." to "consumer spending is rising more quickly" the Fed is in full consensus "everything's gonna be alright " mode. This leaves the Fed buying $25bn a month of Treasuries and $20bn of MBS each month and facing the tough reality that their trillions did not generate enough momentum in the US economy to overcome some snow.

Perhaps more curiously, Kocherlakota did not dissent this time around. Looks like continued tapering is no longer hawkish unlike... continued tapering?

Pre-FOMC: S&P Futs 1874, 10Y 2.66%, EURUSD 1.3865, Gold $1295

Here is the Fed blaming, what else, the weather:

Information received since the Federal Open Market Committee met in March indicates that growth in economic activity has picked up recently, after having slowed sharply during the winter in part because of adverse weather conditions

And here is the full redline comparison:

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slaughterer's picture

STOCK MARKET BLAST OFF!  The economy is "picking up"  Wow, great!  Everybody is buying Teslas and iPads and drinking Starbucks.   Nuttin to worry about, cuz Aunt Yellen said so.  

Timmay's picture

So wait, how are they going to unload that balance sheet?? Oh yeah! MYRA, MYRA....

Obchelli's picture

Tyler Faster Cowboy then Hilthenrath?

No Way

outamyeffinway's picture

There's your emergency meeting, lie about GDP.

BaBaBouy's picture

SURE!!!
FREE Money Fiats For The politcos $ Billionares ...Van Gogh Paintings @ $1/2 Billion...
And NOTHING For The Middle Classes...

Keep On Going Bitchezzzzzzzz...

Max Hunter's picture

EUR/USD isn't buying the story..

rainingFrogs's picture

true dat. 

And it is clearly a fantasy that Belgium is covering only the $10B/month delta.  From the US Treasury's MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES report, here is Belgium's UST holdings from August 2013:

Aug=166.8
Sept=172.5
Oct=180.3
Nov=200.6
Dec=256.8
Jan=310.3
Feb=341.2

Monthly deltas from August: $6B, $8B, $20B, $56B, $54B, $30B.

So if the Fed says it will be cutting bond purchases from $30B to $25B, Fed + Belgium = somewhere between $55B and $85B.

Hardly a taper. Not even sleight of hand.

More like "Who are you going to believe, me or your own eyes?" (Harpo Marx)

Treasury data can be found here: http://www.treasury.gov/ticdata/Publish/mfh.txt
LetThemEatRand's picture

They were debating whether to turn the lie dial to eleven.  It does go to eleven.

aVileRat's picture

Going to bet the off camera meeting was about the CapEx & forward looking Friday unemployment numbers. Yields are not changed, risk on products are sitting quiet. April I think is going to be on the books as one of the worst on record, which should set up for an interesting May, when Buysides start playing musical chairs.

Sucks to be a biotech or tech prop trader right now. Of course, gold and old economy desks are still in the gallows, so not much to be smug about.

Liquidity is going to be tight I suspect on this news.

PPS: Rick on CNBC needs to take some ludes, he's going to talk himself off a job.

 

nope-1004's picture

 

 

*FED TAPERS BOND BUYING TO $45 BLN MONTHLY PACE FROM $55 BLN
*FED SEES BELGIUM TREND OF INCREASING BOND PURCHASES BY $10 BLN/MO ON TRACK
*FED SAYS BELGIUM DATA IS TRANSIENT AND OPEN TO MISINTERPRETATION

Stoploss's picture

We had a closed door meeting yesterday.  Statement pretty much the same except for consumer spending?  Where?

Something is wrong bigtime, their scared.

When in doubt, shut the hell up.. Throw hands in air an say errythang awight!

lordylord's picture

How are the unemployed and underemployed buying shit?  I suppose the government proved that they can force you to buy anything, but I don't remember anything about cheap consumer goods.

valley chick's picture

Yard sale business is doing GREAT! Someone's junk is someone's treasure!

walküre's picture

one man's junk is another woman's treasure

FIFY

spastic_colon's picture

today they will struggle to keep equities flat, tomorrow will be blast off as it is the 1st day of a new month as usual and the ironic day after a fed announcement.

Battleaxe's picture

Belgium will make up for it.

onewayticket2's picture

bingo. 

 

they need to make it seem as though it's spread around.  Eventually, myRA.

Cursive's picture

@Headbanger

 

Wow.  GDP print of basically zero and the FOMC statement says economy "picked up."  If this doesn't expose the Fed for the wealth-sucking, leach fools that they are, nothing ever will.

Headbanger's picture

No they're more like a bunch of drunk kindergarten kids playing "bank" and making shit up.

 

Ooops...  I apologize to drunk kindergarten kids playing "bank"

infinity8's picture

I'm looking a little like your avatar right now. This horseshit and, a friend of mine just got a 1 (one) % pay increase after a year. Smack! *bitch-slap*

walküre's picture

they raised him from $8/hour to $8.08/hour? wow! despite the increased cost of Obamacare? wow wow!

JailBank's picture

Easy to taper MBS when that pool is almost empty. No new MBS to be had.

thamnosma's picture

That's a very good point.  Unloading those MBS is an entirely different matter.   I guess ZIRP will continue to float the stock market.

walküre's picture

not to worry, Fannie and Freddie will need another bailout very soon. It's already in the works.

buyingsterling's picture

They'll find other bad 'assets' to launder.

AlaricBalth's picture

"Consumer spending rising more quickly"
I think that is called inflation!!

viahj's picture

i don't eat or use energy so i'm not affected

Poor Grogman's picture

The fed can always electronically create money and send it straight to the SNAP cards.

I really don't see the problem here....

S/

GolfHatesMe's picture

Where is our freaking Guidance?

Grande Tetons's picture

No shit! At least give me some blue dots for fuck sakes. 

RacerX's picture

ha ha, yep the economy "picked up" alright. Picked up and left.

The_Ungrateful_Yid's picture

Top 20% are fine, bottom 80% are serfs.

JerseyJoe's picture

That is just so fockin' funny.   I wonder how much time and money went into "It's the weather".   

yrad's picture

Where is Jon Corzine?

what's that smell's picture

jon is waiting for the FOMC release so he can watch the market fall a few microseconds and then skyrocket....like the last 200 times.

this one's the best because it was a surprise.

smells like central planning.

cougar_w's picture

Jon Corzine is fed to a fucking tiger:

http://fedtoatiger.blogspot.com/2014/04/jon-corzine-is-fed-to-tiger.html

I hope he reads that some day I really do. I'll get a letter from his lawyer or some shit, which I will print, frame and sell on EBay for $50 a piece.

Bring your crap, Corzine. I'll feed to a mutherfucking tree chipper you mutherfucking whore.

yrad's picture

I am in awe of you, sir...

cougar_w's picture

I stand on the shoulders of giants ...

... really angry giants with great big axes.

walküre's picture

Until he reappears, I believe he was aboard flight MH370 which is never to be found ever again, like never.

Latest news on that story is the plane lies perhaps on the bottom of the Bay of Bengal which is nowhere near Australia of course.