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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Wed, 04/30/2014 - 14:03 | 4712905 Kaiser Sousa
Kaiser Sousa's picture

they lyin...

Wed, 04/30/2014 - 14:06 | 4712914 slaughterer
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.  

Wed, 04/30/2014 - 14:08 | 4712940 max2205
max2205's picture

Churn baby churn

Wed, 04/30/2014 - 14:09 | 4712950 Xibalba
Xibalba's picture

#rigged

Wed, 04/30/2014 - 14:11 | 4712960 Timmay
Timmay's picture

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

Wed, 04/30/2014 - 14:12 | 4712972 Obchelli
Obchelli's picture

Tyler Faster Cowboy then Hilthenrath?

No Way

Wed, 04/30/2014 - 14:17 | 4713010 outamyeffinway
outamyeffinway's picture

There's your emergency meeting, lie about GDP.

Wed, 04/30/2014 - 14:23 | 4713031 BaBaBouy
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...

Wed, 04/30/2014 - 14:24 | 4713045 Pinto Currency
Pinto Currency's picture

 

Where they aren't tapering is their bond buying through Belgium:

http://www.zerohedge.com/news/2014-03-18/meet-brand-new-and-shocking-third-largest-holder-us-treasurys

Wed, 04/30/2014 - 14:54 | 4713248 Max Hunter
Max Hunter's picture

EUR/USD isn't buying the story..

Thu, 05/01/2014 - 08:10 | 4714885 rainingFrogs
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
Wed, 04/30/2014 - 14:25 | 4713033 Pinto Currency
Pinto Currency's picture

 

W-

Wed, 04/30/2014 - 14:23 | 4713037 LetThemEatRand
LetThemEatRand's picture

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

Wed, 04/30/2014 - 14:32 | 4713104 XenoFrog
XenoFrog's picture

Recovery Summer rolls on.

Wed, 04/30/2014 - 14:23 | 4713038 McMolotov
McMolotov's picture

#riggedwithexplosives

Wed, 04/30/2014 - 14:13 | 4712961 aVileRat
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.

 

Wed, 04/30/2014 - 14:29 | 4713055 nope-1004
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

Wed, 04/30/2014 - 14:11 | 4712962 Stoploss
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!

Wed, 04/30/2014 - 14:28 | 4713065 cougar_w
cougar_w's picture

spot on

Wed, 04/30/2014 - 14:11 | 4712965 lordylord
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.

Wed, 04/30/2014 - 14:18 | 4713014 valley chick
valley chick's picture

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

Wed, 04/30/2014 - 16:09 | 4713531 walküre
walküre's picture

one man's junk is another woman's treasure

FIFY

Wed, 04/30/2014 - 14:18 | 4713013 spastic_colon
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.

Wed, 04/30/2014 - 14:05 | 4712920 Battleaxe
Battleaxe's picture

Belgium will make up for it.

Wed, 04/30/2014 - 14:39 | 4713105 onewayticket2
onewayticket2's picture

bingo. 

 

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

Wed, 04/30/2014 - 14:06 | 4712923 Headbanger
Headbanger's picture

Fucking hilarious!

Wed, 04/30/2014 - 14:11 | 4712958 Cursive
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.

Wed, 04/30/2014 - 14:15 | 4712989 Headbanger
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"

Wed, 04/30/2014 - 14:26 | 4713059 infinity8
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*

Wed, 04/30/2014 - 16:11 | 4713537 walküre
walküre's picture

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

Wed, 04/30/2014 - 14:06 | 4712929 JailBank
JailBank's picture

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

Wed, 04/30/2014 - 14:07 | 4712936 thamnosma
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.

Wed, 04/30/2014 - 16:12 | 4713540 walküre
walküre's picture

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

Wed, 04/30/2014 - 14:16 | 4713003 buyingsterling
buyingsterling's picture

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

Wed, 04/30/2014 - 14:06 | 4712931 AlaricBalth
AlaricBalth's picture

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

Wed, 04/30/2014 - 14:17 | 4713011 viahj
viahj's picture

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

Wed, 04/30/2014 - 14:38 | 4713145 Poor Grogman
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/

Wed, 04/30/2014 - 14:09 | 4712949 GolfHatesMe
GolfHatesMe's picture

Where is our freaking Guidance?

Wed, 04/30/2014 - 14:15 | 4712994 Grande Tetons
Grande Tetons's picture

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

Wed, 04/30/2014 - 14:23 | 4713036 NotApplicable
NotApplicable's picture

Too dangerous!

Wed, 04/30/2014 - 14:03 | 4712907 RacerX
RacerX's picture

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

Wed, 04/30/2014 - 14:05 | 4712916 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

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

Wed, 04/30/2014 - 14:06 | 4712932 JerseyJoe
JerseyJoe's picture

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

Wed, 04/30/2014 - 14:03 | 4712909 HedgeAccordingly
HedgeAccordingly's picture

bonds still bid - http://hedge.ly/VwhYtB

Wed, 04/30/2014 - 14:04 | 4712911 yrad
yrad's picture

Where is Jon Corzine?

Wed, 04/30/2014 - 14:08 | 4712945 what's that smell
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.

Wed, 04/30/2014 - 14:32 | 4713102 cougar_w
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.

Wed, 04/30/2014 - 14:37 | 4713131 yrad
yrad's picture

I am in awe of you, sir...

Wed, 04/30/2014 - 14:41 | 4713168 cougar_w
cougar_w's picture

I stand on the shoulders of giants ...

... really angry giants with great big axes.

Wed, 04/30/2014 - 16:17 | 4713554 walküre
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.

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