Those Soaring Food And Gas Prices? The Fed Has A Name For Them: "Noise"

Tyler Durden's picture


Don't worry about the surging food and gas prices you face each and every day... Janet Yellen says "it's just noise" and is actually "evolving exactly as they expected." It is this kind of mind-blowingly ignorant of the facts statement that has the central banks of the world losing more and more credibility (just take a look at the dot plot's 0.5 to 4.25% rate expectations for 2015). The following exchange between Yellen and Liesman is simply priceless in its ignorance.


This looks like a trend to us...


But no - The Fed says its transitory and exactly what they expected...



There's every reason to expect, Madam Chair, that the PCE inflation rate, which is followed by the Fed, looks likely to exceed your 2016 consensus forecast next week. Does this suggest that the Federal Reserve is behind the curve on inflation? And what tolerance is there for higher inflation at the Federal Reserve? And if it's above the 2 percent target, then how is that not kind of blowing through a target the same way you blew through the 6.5 percent unemployment target, in that they become these soft targets? Thanks.


So I think recent readings on, for example, the CPI index have been a bit on the high side, but I think it's -- the data that we're seeing is noisy. [ZH: What noise?]


I think it's important to remember that, broadly speaking, inflation is evolving in line with the committee's expectations.


The committee has expected a gradual return in inflation toward its 2 percent objective. [ZH - It's already there!!!!!] And I think the recent evidence we have seen, abstracting from the noise, suggests that we are moving back gradually over time toward our 2 percent objective and I see things roughly in line with where we expected inflation to be.


I think if you look at the SEP projections that were submitted this time, you see very little change in inflation projections of the committee. [ZH: Because you are all ignorant!!]

Still believe The Fed has inflation all under control?

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Wed, 06/18/2014 - 15:33 | 4870717 Four chan
Four chan's picture

same asset as always, measured against a devaluated/inflated currency.

Wed, 06/18/2014 - 15:41 | 4870761 DoChenRollingBearing
DoChenRollingBearing's picture

Yet the Baltic Dry Index is at a one year low ($858), it has not been loewr before then, but not much:

(, enter symbol $BDI)

Wed, 06/18/2014 - 15:42 | 4870770 AlaricBalth
AlaricBalth's picture

. " is that not kind of blowing through a target the same way you blew through the 6.5 percent unemployment target, in that they become these soft targets?"

Steve Liesman is such a joke. The Fed knows, but will not state, that the 6.5% unemployment number is an illusion.

Let's all stop working and looking for work so we can achieve a 0.00% unemployment rate.

Wed, 06/18/2014 - 15:44 | 4870780 DoChenRollingBearing
DoChenRollingBearing's picture

You commented before I could clean up my typos!  BDI at HAS been lower than $858, but that was way back when...

Wed, 06/18/2014 - 15:47 | 4870795 AlaricBalth
AlaricBalth's picture

Sorry DoChen.  You have to be quick around here.

Wed, 06/18/2014 - 16:21 | 4870952 James_Cole
James_Cole's picture

It's a catch22, no matter whether due to fed action or inaction these trends will remain. Fed action does manage to hide ugly realities about US economy though. 

Wed, 06/18/2014 - 16:38 | 4871024 RaceToTheBottom
RaceToTheBottom's picture

I cannot afford any more of this noise!!!

Wed, 06/18/2014 - 16:53 | 4871069 AlaricBalth
AlaricBalth's picture

Bleed you dry
Against your will
Think you're running
But you're standing still

It's all you wanna do now
Yeah Yeah
It's all you wanna do now

Stop the noise!
You gotta stop the noise, man!
Only in America

Zeromancer - Stop The Noise Lyrics | MetroLyrics

Wed, 06/18/2014 - 17:34 | 4871177 COSMOS
COSMOS's picture

LOL yep just NOISE

Just like the gurgling stomach sounds of the millions who can't afford to buy as much food here and abroad due to USA fed inflation LOL

If they say they are hungry tell them its 'Just Noise' coming from their stomachs....

Wed, 06/18/2014 - 19:16 | 4871545 boogerbently
boogerbently's picture

I would say that all factors OTHER than food and gas are "noise".

Thu, 06/19/2014 - 02:49 | 4872628 SF beatnik
SF beatnik's picture

Here in Cal, shopping at Whole Foods Market, in recent years, my sense of the rate of inflation of food prices is upward of twenty percent per year. 

Wed, 06/18/2014 - 16:55 | 4871074 jbvtme
jbvtme's picture

madam comrade...did you say "the committee"?

Wed, 06/18/2014 - 16:40 | 4871031 nink
nink's picture

We have now added sand to the inflationary index.  We do not view the large amount of sand in the world and low demand is an issue.

After performing detailed analyses we have noticed the cost of sand is dramtically decreasing so we have reduced the average inflation rate accordingly and find the new overall inflation rate is -2% so we are actually in a deflation situation. 

Wed, 06/18/2014 - 16:53 | 4871066 AlaricBalth
AlaricBalth's picture

Double Post. My Bad

Wed, 06/18/2014 - 16:31 | 4870998 clownfishheaven
clownfishheaven's picture

It has dawned on me that if we can have negative interest rates, it's possible that negative unemployment rate is not far behind.

Wed, 06/18/2014 - 16:37 | 4871022 AlaricBalth
AlaricBalth's picture

"Because taking current trends across all employment indicators, using 12 Month trailing averages in the changes of those employed, unemployed and dropping out the labor force, we can predict, with IMF-level precision, that at the current surge of those leaving the labor force, the US unemployment rate will hit 0.0% in December of 2021 and finally go negative, or -0.1% in January 2022."

Wed, 06/18/2014 - 16:50 | 4871060 Steverino
Steverino's picture

to be expected from a report who's name is "Lies-man"....

Wed, 06/18/2014 - 16:51 | 4871061 Steverino
Steverino's picture


Wed, 06/18/2014 - 15:44 | 4870783 Da Yooper
Da Yooper's picture

Figures dont lie - BUT professional liars sure can figure

Wed, 06/18/2014 - 16:05 | 4870877 Uber Vandal
Uber Vandal's picture

Fear not, when it goes up, even a few percentage point, or even if / when it breaks 1000 again, it will be heralded as how the economy is on the mend, and all is well.

When it replays the fate of the Titanic, Empress of Ireland, Britannic, and Lusitania, there is NEVER a peep from the media, or if there is, the media will insist that it is an obsolete metric and should be ignored.

Wed, 06/18/2014 - 15:33 | 4870719 rsnoble
rsnoble's picture

Fuck you bitch!

Wed, 06/18/2014 - 15:36 | 4870734 Double.Eagle.Gold
Double.Eagle.Gold's picture


are you sure you really want to express those exact sentiments


to her?



Wed, 06/18/2014 - 15:35 | 4870724 alien-IQ
alien-IQ's picture

what else would you expect from people who don't have to pay for their own food and gas?

people who don't own stock (i.e. most of america) call the stock market "noise". granted, that's only the people who are paying attention, which is admittedly few....but nevertheless...

Wed, 06/18/2014 - 15:53 | 4870827 Number 156
Number 156's picture

All of this noise is making me hungry.


Wed, 06/18/2014 - 16:19 | 4870948 alien-IQ
alien-IQ's picture

wait for the edible i-pads. they'll be released soon...and probably cost less than a steak.

Wed, 06/18/2014 - 17:35 | 4871180 COSMOS
COSMOS's picture

I think the noise is coming from your STOMACH, hahah just wait and see how much less you will be able to buy for it with inflation...

Wed, 06/18/2014 - 16:42 | 4871037 RaceToTheBottom
RaceToTheBottom's picture

Here, eat my iPad

Wed, 06/18/2014 - 15:35 | 4870725 NOTW777
NOTW777's picture

just like the "bumps in the road" in benghazi

Wed, 06/18/2014 - 15:34 | 4870726 rum_runner
rum_runner's picture

It's the Federal Reserve equivalent of "nothing to see here, move along."

Wed, 06/18/2014 - 15:35 | 4870730 Jethro
Jethro's picture

What are they measuring to get 2%?

Thu, 06/19/2014 - 07:35 | 4872847 N2OJoe
N2OJoe's picture

They go to the supermarket, check the price of meat, and mark it down 18 percentage points.

BAM 2% inflation!

Wed, 06/18/2014 - 15:37 | 4870738 alien-IQ
alien-IQ's picture

the size of bernake's dick in relation to 1 inch?

Wed, 06/18/2014 - 15:46 | 4870790 Babaloo
Babaloo's picture

They use the PCE deflator, which is running about 1.5%.

Wed, 06/18/2014 - 15:39 | 4870732 Squid Viscous
Squid Viscous's picture

as long as the price of Geviltefish is the same at Fairway Mkt on the upper west side, it's all good you dumb goys, and god forbid it goes up, I can still afford it....

Wed, 06/18/2014 - 15:40 | 4870739 Joe Tierney
Joe Tierney's picture

Now we know what's inside that bloated head of her's - NUTHIN'


Jammit Mellon - Fed Chair-Woman?


Is she Druish?

Wed, 06/18/2014 - 15:37 | 4870741 Bay of Pigs
Bay of Pigs's picture

2%? WTF?

Its a lot higher than that Mr Yellin.

Wed, 06/18/2014 - 15:39 | 4870748 Al Huxley
Al Huxley's picture

Just ignore discretionary things like gas and food, and then it snaps right back under.

Wed, 06/18/2014 - 15:41 | 4870764 Bay of Pigs
Bay of Pigs's picture

Dont forget cable, taxes, tuition and long list of other things that are steadily going UP.

Wed, 06/18/2014 - 15:51 | 4870819 ParkAveFlasher
ParkAveFlasher's picture

It's all in, it's up to the discretion of whomever is telling you the inflation rate, whethere or not to actually present the inflation rate to you.

Wed, 06/18/2014 - 16:00 | 4870852 pakled
pakled's picture

Cable? did someone say CABLE? Cable = ZH. Better classify it with food & energy.

Wed, 06/18/2014 - 17:54 | 4871228 Rubbish
Rubbish's picture

I'm now raising my service rates to my clients every 6 months, they aren't happy about it. I refuse to be left behind if I can avoid it. It's do or die.


Everything is going up, these fuckers.

Wed, 06/18/2014 - 15:37 | 4870742 Al Huxley
Al Huxley's picture

Still believe The Fed has inflation all under control?

Well, no, but then again, I never really did.


Wed, 06/18/2014 - 15:38 | 4870743 lasvegaspersona
lasvegaspersona's picture

no inflation in the price of gold...fer sure...

Wed, 06/18/2014 - 15:45 | 4870791 DoChenRollingBearing
DoChenRollingBearing's picture

Not yet...

Wed, 06/18/2014 - 15:56 | 4870840 Four chan
Four chan's picture

now thats an ironic fact.

fed owners to banks: "buy everything you can with zirp, except gold, let china have all that."

Wed, 06/18/2014 - 15:39 | 4870752 The Duke of New...
The Duke of New York A No.1's picture

That "noise" is the middle-class screaming that they are being wiped out.

Wed, 06/18/2014 - 15:48 | 4870803 Da Yooper
Da Yooper's picture

Oy oy oy

but ve hab terroists running loose all over the middle east oy oy oy

de middle class vill hab to wait

Wed, 06/18/2014 - 16:27 | 4870977 corporatewhore
corporatewhore's picture

they may be screaming but major league baseball and the kardashians keep drowning them out.

Wed, 06/18/2014 - 15:39 | 4870753 buzzsaw99
buzzsaw99's picture

when the fed says inflation they mean wage inflation

Wed, 06/18/2014 - 16:04 | 4870778 fonzannoon
fonzannoon's picture

exactly right, and the fed is correct about that, and it's why as long as prices of necessities keep going up without wages going up as well we will continue to have deflationary pressures in the economy. 

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