This page has been archived and commenting is disabled.

Hilsenrath Backs Away From His "Considerable Time" Prediction

Tyler Durden's picture




 

Yesterday's exuberant equity market reaction has been largely defined by the mainstream media as driven by WSJ Hilsenrath's 'confirmation' that Yellen will keep the uber-dovish phrase "considerable time" in the FOMC statement today. So, we wonder, why did the Fed-whisperer, after markets had closed last night, issue a quasi-retraction of his prediction explaining that instead of some prohetical "I just know" statement, it was a "best guess," as he concluded, "will the Fed take these steps? Only the people in the room know that. The rest of us will see Wednesday afternoon." It appears the sell-side disagrees with him on the language...

 

Via WSJ,

In a webcast Tuesday, I explained why I thought the Federal Reserve would stick with, but qualify, an important phrase in its policy statement Wednesday which assures near-zero interest rates for a “considerable time.” This was simply my best analysis of where I think the Fed is going based on what we have been reporting and what officials have said in the past.

 

...

 

Here’s my analysis: Janet Yellen is a methodical individual and the Fed, in normal times, is a slow-moving institution. It takes time for debates to play out. Ms. Yellen is seeking consensus, as we reported earlier this week. The considerable time debate doesn’t feel ripened or fully aired. When Ms. Yellen has used the phrase in recent months she has qualified it, but not suggested changing it. Meantime the Fed has other business on its plate. The exit plan has been in the works for months, as has the plan to end bond buying. Changing the “considerable time” guidance now, while also announcing an exit plan, could be viewed by market participants as a surprising move toward raising rates.

 

Fed officials haven’t forgotten last year’s “taper tantrum,” when long-term interest rates shot up as they commenced discussions about winding down the bond program.

 

We reported earlier this week that Ms. Yellen, as Fed chairwoman, hasn’t behaved as the easy-money policy “dove” that many market participants expected. That doesn’t mean she’s suddenly a hawk. It just means she’s not a dove.

 

Ms. Yellen’s most logical next step, to my mind, would be to stick for the time being to what she’s been saying, which is that rates will stay low for a “considerable time” with the strong qualification that this could change if the job market keeps improving quickly. Staying on message this month could entail signaling an end to the bond program and a more formal exit strategy. The Fed would then have time to air out a change in the “considerable time” formulation for a later date, giving Ms. Yellen time to get all of her colleagues on board.

*  *  *

He concludes: "Will the Fed take these steps? Only the people in the room know that. The rest of us will see Wednesday afternoon."

*  *  *

Indeed Jon.

*  *  *

But here is what the sell-side thinks...

Fed expected to adopt more hawkish stance at Sept. 16-17
meeting, debate whether to drop “considerable time” language from
statement, based on published research.

Barclays

  • Fed expected to take “modestly hawkish” tone at meeting, Barclays strategists led by Rajiv Setia wrote in report
  • “Dovish dots” seen moving higher, press conference will have “subtle shifts” in tone
  • Fed likely to retain “considerable time” language; if dropped,
    “front end should get hurt” and “10/30 curve should still flatten”

BofAML

  • First rate increase now seen as occurring next June vs. Sept. 2015, economist Ethan Harris wrote in note
  • Growth has been stronger than expected, while inflation is in line with Fed’s forecast
  • Fed could drop reference to “considerable time”

Jefferies

  • Fed statement to be “somewhat more hawkish” than in past, economists Ward McCarthy, Thomas Simons wrote in note
  • FOMC meeting will fail to clarify ambiguity over timing of rate lift-off

JPM

  • First rate increase is now expected next June vs 3Q 2015, economist Michael Feroli wrote in note
  • Sees 25bps increase in Fed funds corridor to 25bps-50bps; subsequent
    moves in Sept. and Dec., bringing corridor to 75bps-100bps by end of
    2015

Market Securities

  • Fed to modify “considerable time,” cut QE by another $10b, strategist Christophe Barraud wrote in note

Morgan Stanley

  • Fed’s 2017 dots may prompt curve shifts, strategists led by Matthew Hornbach wrote in note
  • “Stage is set for some disappointment” if Fed doesn’t change “considerable time” language

Renaissance Macro

  • Fed’s more hawkish outcome may be priced into markets now, economist Neil Dutta wrote in note
  • “We cannot be entirely sure” how hawkish FOMC meeting will be

SGH Advisors

  • FOMC may change forward guidance language, CEO Sassan Ghahramani wrote
  • Growing number of FOMC members appear to be pressing for change

Standard Chartered

  • FOMC meeting to have “moderately hawkish tone,” economist Thomas Costerg wrote in note
  • Fed members will note downward trend in unemployment rate, healthy payroll growth
  • “Considerable time” expected to be removed

TD

  • Fed to change “considerable time wording, take more hawkish tone,
    Eric Green, head of U.S. rates and economic research, wrote in note
  • Fed policy is set to become more flexible, retain message that there will be slow path to normalization
 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 09/17/2014 - 08:33 | 5225691 Stackers
Stackers's picture

When lacking facts baffle em with bullshit

Wed, 09/17/2014 - 08:35 | 5225696 PartysOver
PartysOver's picture

All about DisInformation.  Its an exciting thing to watch play out.

Wed, 09/17/2014 - 08:37 | 5225712 Richard Chesler
Richard Chesler's picture

HilsenRAT: I hope you tribe members sold HIGH.

Fuck the goyim!

 

Wed, 09/17/2014 - 08:49 | 5225737 SoilMyselfRotten
SoilMyselfRotten's picture

Dunno know if that'll work for Janet, in the paraphrased words of our Congressional warmongers, 'you can't announce a date for withdrawl because the enemy will just sit back and wait you out'. 

Wed, 09/17/2014 - 09:03 | 5225776 WhyDoesItHurtWh...
WhyDoesItHurtWhen iPee's picture

Soothsayers and Fortunetellers checking the entrails for "forward guidence". 

Wed, 09/17/2014 - 09:08 | 5225795 JRobby
JRobby's picture

Rates are going nowhere

Wed, 09/17/2014 - 09:24 | 5225860 Arius
Arius's picture

i thought people on their parents basement listen to lisenrath ... it never occurred to me the banks actually paid attention to what the newspapers wrote ... i thought they did the writing in advance, or at least the outline

Wed, 09/17/2014 - 09:19 | 5225844 Groundhog Day
Groundhog Day's picture

I bet they will remove the language so that interest rates rise along with the dollar.....just so they can burn the chinese and russians.  who were they kidding...it's getting serious now and the US is not going to just hand over the reserve status without a fight....a bloody fight

Wed, 09/17/2014 - 08:37 | 5225707 dressguard
dressguard's picture

Hilsenrath was blowing Bernanke's dick every day. But he is not a Yellen mouthpiece. Demoted!

Wed, 09/17/2014 - 10:27 | 5226114 robertsgt40
robertsgt40's picture

 "...if the job market keeps improving quickly."---Define improving

Wed, 09/17/2014 - 08:36 | 5225697 max2205
max2205's picture

RIGGED

Wed, 09/17/2014 - 08:36 | 5225698 max2205
max2205's picture

RIGGED

Wed, 09/17/2014 - 08:35 | 5225699 max2205
max2205's picture

RIGGED

Wed, 09/17/2014 - 08:36 | 5225701 max2205
max2205's picture

RIGGED

Wed, 09/17/2014 - 08:36 | 5225702 max2205
max2205's picture

RIGGED

Wed, 09/17/2014 - 08:37 | 5225703 max2205
max2205's picture

RIGGED

Wed, 09/17/2014 - 08:43 | 5225720 d edwards
d edwards's picture

Instead of real economics, it's all just word games/mind games.

Wed, 09/17/2014 - 08:43 | 5225721 Kaiser Sousa
Kaiser Sousa's picture

+++ for the 5 peat...

Wed, 09/17/2014 - 08:53 | 5225740 GetZeeGold
GetZeeGold's picture

 

 

He gets a little emotional.

 

Cut him some slack. He just found out global warming was totally fake....then we told him about Santa Claus.

Wed, 09/17/2014 - 14:02 | 5226924 JRobby
JRobby's picture

I think its rigged 6 X over

Wed, 09/17/2014 - 08:44 | 5225725 knukles
knukles's picture

Publish or perish.

Wed, 09/17/2014 - 12:45 | 5226603 KnuckleDragger-X
KnuckleDragger-X's picture

They talk about monkeys with typewriters but what about weasels with press releases.....

Wed, 09/17/2014 - 08:45 | 5225727 tvdog
tvdog's picture

Kind of like the middle ages, when the success of a business depended on the favor of the king ...

Wed, 09/17/2014 - 09:09 | 5225798 JRobby
JRobby's picture

Middle Ages to the fifth me thinks.

Wed, 09/17/2014 - 08:47 | 5225735 MATA HAIRY
MATA HAIRY's picture

he had a bet on bonds, and he made a little money that day.

Wed, 09/17/2014 - 08:57 | 5225751 ekm1
ekm1's picture

Nobody cares about the Federal Reserve of the United States of America

 

All eyes are at the White House, not the Fed. Nobody gives a flying excrement about the Fed.

 

Printing money is now a military issue. World is abandoning USD.

Wed, 09/17/2014 - 09:30 | 5225877 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Give me whatever you are smoking if you really believe that. That must be some good shit.

 

Wed, 09/17/2014 - 10:07 | 5226028 NotApplicable
NotApplicable's picture

The WH couldn't be more irrelevant if they tried.

Wed, 09/17/2014 - 09:04 | 5225772 all-priced-in
all-priced-in's picture

I don't drink,  I don't smoke, I don't have sex with prostitutes and I don't swear.

 

 

 

God damn it - I forgot my fucking cigarettes in the whore house bar.

 

 JH

 

 

 

 

Wed, 09/17/2014 - 09:06 | 5225787 forwardho
forwardho's picture

Correlation does not imply causation.

The movement in the market (14/9/17) had far more to do with a central bank dumping a half trillion in liquidity than the utterances of some bloviating idiot.

The logic here is faulty at best.

Pay no attention to the CB behind the curtain.

Wed, 09/17/2014 - 09:09 | 5225801 JRobby
JRobby's picture

backup to post?

Wed, 09/17/2014 - 11:09 | 5225862 Cacete de Ouro
Cacete de Ouro's picture

The Wizard of Oz analogy of the little old guy behind the curtain pulling the levers is looking more and more prophetic by the day

This whole Fed meeting of old geezers would be nonsense if it wasn't so intrinsic to the fucked up financial system

Wed, 09/17/2014 - 09:31 | 5225886 Cheyenne
Cheyenne's picture

HIlsenrath epitomizes everything that's wrong with America. To call him a brown-noser understates how far his whole maw is embedded up elite ass. This is all of journalism. Instead of Hunter Thompsons and Mike Roykos, we've got the high school student council.

And it's everywhere too, most if not all industries, not just the horrible parade of media puppet ass wipes. It's all about your fucking "network" now.

We're paying through the nose for this, and in subtle ways too.

When I was a kid (I'm 48), most "rich" people I met (a pretty low threshhold back then; you were in rare company making over $50K a year) were gracious, a character trait that's all but extinct today. The current slice of rich America is loaded with hill jacks who don't know shit about anything except how to bluster and huff their way through a conversation--saying nothing and revealing all.

Wed, 09/17/2014 - 11:46 | 5226394 yogibear
yogibear's picture

"were gracious, a character trait that's all but extinct today. The current slice of rich America is loaded with hill jacks who don't know shit about anything except how to bluster and huff their way through a conversation--saying nothing and revealing all."

Well said!

Wed, 09/17/2014 - 09:48 | 5225969 LooseLee
LooseLee's picture

John Hilsenrath: What a pathetic excuse for a human being. This tool has no soul and is a coward hiding behind the Pinko Commie Fascist curtain that is the Federal Reserve. Woe to those treasoners who have destroyed this once great country.

Wed, 09/17/2014 - 10:19 | 5226081 the not so migh...
the not so mighty maximiza's picture

I think she is going more dovish, she will spread her wings and fly around the room dropping fiats out her pie hole

Wed, 09/17/2014 - 11:16 | 5226289 Nobody For President
Nobody For President's picture

Listing all the bank forecasts makes reading entrails close to rocket science.

Wed, 09/17/2014 - 11:44 | 5226386 yogibear
yogibear's picture

John Hilsenrath is the NY Fed's, William Dudley's, knob polisher.

Do NOT follow this link or you will be banned from the site!