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JPMorgan's 16 Reasons Why The Fed Should Hike Rates (And 5 Excuses For Delaying)
Things are getting a bit hotter for the Federal Reserve regarding the tradeoff between growth and inflation, according to JPMorgan CIO Michael Cembalest. For the last few years, he notes, a zero rate policy was put on autopilot given excess labor and industrial capacity. Both are shrinking now, and when looking at a broad range of variables, some are clearly mid-cycle. If so, in a few months Fed governors will have to jump out of the 0% interest rate pot and remove some of the liquidity that it has infused into the US economy; and, Cembalest warns, despite today's jobs print, they may have to do so at a quicker pace than what markets are pricing in.
As Cembalest concludes,
To be clear, the Fed might not define things like credit market liquidity and investor risk-taking as factors that should explicitly influence policy rates (although retiring Fed governor Stein has mentioned credit market distortions as something the Fed should be concerned about). But when you combine these factors with the rest of the picture (a recovery in growth, gradually rising inflation and shrinking excess capacity), it is harder to justify the “emergency policy rates” now in place. One thing is for sure: monthly wage and consumer price inflation reports are going to be very closely watched from here on out, adding a source of volatility to US equity markets.
Source: JPMorgan's Michael Cembalest
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The FED doesn't give a shit about employment or inflation, only floating equities.
And we the little people are the frogs in the pot.
Have you seen the enormous rise in cancer rates in the USA over the last 5 yeas?
You don't need to be in the pot.
We have to raise rates because the economy is overheating? We skipped the recovery and went straight to escape velocity?
Exactly.
We will raise interest rates just like Japan has consistently done ever since their own crash 25 years ago:
http://www.housingjapan.com/wp-content/uploads/2011/11/japan-interest-rates.gif
[Long Cash, Bonds, Gold: We are all Japan now...]
Forget inflation, we are in a deflation spiral and the stock market knows it. Only place to hide is in short term Treasurys or cash. The time to buy gold is at $1050 or lower. Silver somewhere near $15.00. Now is not the time to be chasing yield, dividends or return on equity. IMO.
You can always depend on what Efrem Cembalist Jr. says.
I liked that old FBI guy, Inspector Lewis Erskine. He was a "Fed" you could trust.
Another "Fed" I'd put money on is Special Agent Pendergast. None more competent or more ethical.
will this make the front page of ZH:
https://www.youtube.com/watch?v=M5oXlIB9rCk
or this:
http://www.trust.org/item/20140905214217-wcrqt
FREETOWN, Sept 5 (Reuters) - Sierra Leone will impose a four-day, countrywide "lockdown" starting Sept. 18, an escalation of efforts to halt the spread of Ebola across the West African country, a senior official in the president's office said on Friday.
The move underscores the radical steps West African nations are being pushed to take, over six months into an outbreak that is the worst on record and shows no sign of easing having already killed over 2,100 people since March.
Citizens will not be allowed to leave their homes between Sept. 18-21 in a bid to prevent the disease from spreading further and allow health workers to identify cases in the early stages of the illness, said Ibrahim Ben Kargbo, a presidential adviser on the country's Ebola task force.
"The aggressive approach is necessary to deal with the spread of Ebola once and for all," he told Reuters. As of Friday, Sierra Leone has recorded 491 of the total of suspected, probable and confirmed Ebola deaths, according to U.N. figures.
Kargbo said 21,000 people would be recruited to enforce the lockdown. Thousands of police and soldiers have already been deployed to enforce the quarantining of towns in Sierra Leone's worst-hit regions near the border with Guinea.
Nah, screw Ebola and Ebola news. More damage and deaths are caused by OBOLA.
how will this one play out?
http://uk.reuters.com/article/2014/09/05/uk-estonia-kidnapping-idUKKBN0H...
(Reuters) - Estonia said one of its security officers had been abducted on the border and taken into Russia on Friday as he tried to stop illegal activity on the border, but Russia said he had been detained on its territory as a suspected spy.
Estonian Foreign Minister Urmas Paet said Tallinn had contacted Moscow about the incident, on a border that in recent years has seen a number of incidents involving the smuggling of goods, weapons and migrants.
"He was captured by force, at gunpoint. He was fulfilling his duties preventing cross-border criminal activity," a Security Service statement said. It said the unidentified abductors had jammed radio communication at the Luhamaa checkpoint and used a smoke grenade as they seized him.
Russia's Federal Security Service (FSB), successor to the Soviet KGB, said an Estonian officer, identified as Eston Kohver, had been detained on Russian territory and was being investigated.
"A Taurus handgun with ammunition, 5,000 euros in cash, special equipment for concealed audio recording and documents that bear evidence of an intelligence mission were seized from the intruder," it said in a statement.
interesting comments here:
http://www.reddit.com/r/europe/comments/2fjpck/estonian_counterintellige...
Jamie says he wants a rate rise so he can satisfy Blythe...
Balance is important and like so many things in life when it comes to economic policy it is very important to balance the markets reward when it comes to savings and debt. Savings plays an important role in the economy and has been shortchanged, this will come back to haunt us.
The idea of being frugal and living within our means has not been given due credit, living by increasing debt is far too acceptable. When we find it necessary to discuss savings we are back to basics and it is a sign we have strayed far off course in our economic policy. More on this subject in the article below.
http://brucewilds.blogspot.com/2014/09/savings-and-role-it-plays-in-econ...
That's why I bought guns and ammo. Just wait till the EBT cards don't work anymore. Credit cards that carry a balance are your worst enemy. Don't fall into that trap.
The stock market will continue to make no sense just like the housing bubble. Until it all comes crashing down. Only this time the stock market will never recover in our lifetime.
Be patient and buy physical gold and silver at the prices I said in my last post. I'm a stacker, but I can wait to really buy the dip.
Yes, Deflation first, then in/hyper inflation later. Again, IMO. Cheers.
I agree, and this time it will be a GLOBAL crash (since everone is printing fiat) and there will be a NWO indeed.
ISIS here he be. Jamie Dimon is your man.
They have to raise the rates but not because of these reasons. It's because of the mirage. If they don't go to 1% soon they won't be able to lower the rates again when things break loose. The facade that the Fed's policies actually have effect must continue and so must the central bank circle jerk.
The real danger seems to be that all the reasons to hike rates are based on fraudulent, manipulated gov't data.
They will raise rates when they can completely manipulate the outcome of raising rates, silly. They cannot do it yet.
When the tribe wants to raise rates and turn up the heat on the working class goyim, they will do so. Nothing they've done so far has benefited main street. It's unjust legalized theft of a very distracted public. No one really knows how this sh*t really works or who's behind it.