"The Economic Outlook Keeps Getting Better And Better" Says Fed President Who Last Week Unveiled QE4

Tyler Durden's picture

If one didn't know better, the clinical assessment of everyone at the Fed, from such alleged former hawks as St. Louis Fed's James Bullard, whose bullshit last week unveiled the Dow-Dependent FedTM and was sufficient to get him the honor of the Friday chart of the day, to such permadoves as San Francisco Fed's John Williams, who also last week infamously halted the market crash and launched the "Moar QE" rally when he said that "More QE may be needed if economy falters" is that they are all schizophrenics, every last one of them, one day demanding an end to QE, the next day saying the liquidity firehose is not big enough.

Of course, one does know better, and what is going on here is that all the Fed's clueless presidents are simply all terrified of what will happen when the Fed finally does lose control, because that would be the end of their centrally-planned ivory tower (for more details see: USSR). As a result they will say whatever is necessary to urge the market ever higher even as the rally runs out of its 6 year long, artificial sugar-high, central bank liquidity.

Case in point, less than a week after Williams hinted at QE4 being just around the corner if the stock market rout doesn't stop, earlier today he released a speech that could easily have come from a biopolar, mentally-ill patient.

Some of the more chemically imbalanced excerpts:

I’ll be honest: These speeches get more and more enjoyable as time goes by because the economic outlook keeps getting better and better. Instead of gloom and doom with a scattering of hopeful notes, things are now pretty upbeat, with only a couple of standard economist’s caveats thrown in.


To wit: After a dip in the first quarter, real GDP bounced back sharply in the second quarter. All the data point toward momentum having been sustained entering the second half of the year, with solid gains in consumer and business spending. Taking all the pieces of information together, I expect real GDP to grow at about a 3% annual rate over the second half of this year and next (Liu 2014).

For those buying ES, the good news abounds. For everyone else, there is hope:

Why hasn’t wage growth picked up more as the economy’s improved? A recent study by Daly and Hobijn (2014) at the San Francisco Fed found that there was something of a floor on wages during the recession and recovery. Employers are generally reluctant to cut wages outright, so as the recovery has unfolded, wages have in many cases stayed stagnant, making up for the losses they didn’t—or couldn’t—incur during the depths of the recession. That is certainly a contributing factor. But, as unemployment continues its move down, we should see those effects wane and wages gradually move up.

Any minute now.

I’ve said it often enough that I should probably have a T-shirt, but let me reiterate: The decision to raise rates will be data-driven, not date-driven. Based on my current forecast for economic growth, employment, and inflation, it would be appropriate to start raising the fed funds rate sometime in the middle of 2015. If the economy or inflation heat up faster than I expect, we should lift rates sooner. If progress on these fronts slows, we should wait longer.

What he really meant is Dow-driven. It's an easy mistake to make.

And while I think the Bureau of Labor Statistics and Bureau of Economic Analysis do fantastic jobs of collecting and distilling inflation data, I also look at—and point critics to—more straightforward assessments like the Billion Prices Project (2014) from the Massachusetts Institute of Technology. This tool scrapes the Internet for prices, giving a daily reading of, well, billions of prices of myriad products. It lacks the complicated adjustments and methods that characterize the government agencies’ models. Nonetheless, it does track pretty closely with the official numbers. What’s more, it gives an independent assessment of consumer prices that is helpful for those who may distrust official federal data. While the BPP’s numbers run a tad higher on average than the official indices, it shows that price inflation remains low and shows no sign of taking off.

That's odd: we thought only tinfoil fringe site cash the BLS' data fudging.

And since no Fed speech would be complete without the speark confirming they have no idea at all how to exit a $4.5 trillion balance sheet, here it is again:

First, we’ll pay interest on reserves held at the Fed. That is, when banks park their money with the Fed, we pay them interest on that money. By increasing the rate we pay to banks for the money they hold with us, we give them the incentive to keep their reserves with us, rather than having funds flow into the market and overheat the economy.

Second, we have a new tool, the reverse repo facility, which folds nonbank financial institutions into that process as well. They’ll have the ability to keep their cash with us in exchange for temporarily holding our assets, with a return that’s below that on excess bank reserves.

These and other tools will help us keep good control as we raise the target range for the federal funds rate. And, like all tools, we’ll use them appropriately. The reverse repos in particular will be carefully managed, and we’ll eventually eliminate their use when they are no longer needed.

It's all very technical though, so just take his word.

Instead of going further into more extensive technical explanations, I’ll note that this is how policy is best managed: having a well-thought-through plan. Once you have the plan, it’s just a matter of executing it. I have every faith that we’ve looked at this from every angle and that we can manage the transition over time.

Indeed, just trust the Fed. After all, have they ever been wrong before.

So the message is that things are getting better. We’re on track to end our asset purchases and we’re preparing for the time the economy can sustain an end to accommodation. We’ll want to see improvements in unemployment, wages, and inflation, and we’ll be driven by the data. But all in all, it’s good news—with just a few of those requisite caveats thrown in.

For those who don't know whether to laugh or cry, how about both? The chart below should help:

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Manthong's picture

“All the data point toward momentum having been sustained entering the second half of the year, with solid gains in consumer and business spending.”


I guess the bozo does not understand his own f’n data.


nope-1004's picture

White collar criminal lying POS.



Oh... what's that?  We just happen to have Dicky Fischer on the phone?  Dick go ahead and spread your monetary propaganda this morning.

hedgeless_horseman's picture



...less than a week after Williams hinted at QE4 being just around the corner if the stock market rout doesn't stop, earlier today he released a speech that could easily have come from a biopolar, mentally-ill patient.

Talking the market up, or down.  The sad thing is that it works so well.  More and more people are blind to obvious contradictions, lies, and horseshit.

Save_America1st's picture

Sociopaths tell lots of lies...

just sayin'...

NotApplicable's picture

Just the fact that the "Milken Institute" exists blows my mind.

TeethVillage88s's picture

Psst, hey Buddy. QE is a Psyop. Pass it on.

NoDebt's picture

Causality, friends.  Causality.

It's getting better BECAUSE he announced QE4 last week.

Honey Badger's picture

"I'll be honest..."  Too funny!

The9thDoctor's picture

Gas prices are down; silver and gold are down; despite the DOW's little dip in the road, stawks are at all time highs; real estate is up and up and good for boomer's selling, I would say with all of this central manipulation things look so great on the SURFACE.

Fundamentally things are... ha, oh yeah fundamentals are so '70s.

BringOnTheAsteroid's picture

He's got that same bugeyed look of euphoria of an evangelical christian. 

WTFRLY's picture

US Citizen, Press TV reporter dead in car crash near Syria 2 days after Turkey calls her a spy


ebworthen's picture

He's getting instructions from the headset via the command module for the Grays controlling him.

trulz4lulz's picture

Can't be, he just said, "Better and Better". To me, thats pretty much as better as it gets.

WOD's picture

au contraire mon frere.. betterer and betterer would be more betterer!

BringOnTheAsteroid's picture

I'm confused. If it's getting better and better why did he suggest QE4 may be needed.

If he isn't insane he sure as hell looks insane.

F0ster's picture

Its just a confidence game

TeethVillage88s's picture

Psst, hey Buddy. QE is a Psyop. Pass it on.

I mean totally a Psyop. Run by the NSA or CIA.

I heard the CIA, NSA, DCI, DNI, DIA, FBI, J Edgar Hoover, William Colby, Allen Dulles, Wild Bill Donovan all Joined with the Owners of the FED to secretly control the Whole World.

But keep it a little big under your hat. But pass it on. They have always just created money out of thin air when ever they wanted it. Steal gold, counterfeit currency, lander black market drug money, whatever.

The9thDoctor's picture


That joke would have been funny in 2009. Get with the times.

jcpicks's picture

Winter is right around the corner...

One little snowstorm may change your entire 'outlook'.

just-my-opinion's picture

And we didn't know this was gonna happen?  There is only one reason to do this.....The markets are broken....and they know it!

stinkhammer's picture

rope, check  lamppost, check

Colonel Klink's picture

I HATE being bipolar, it's AWESOME!

CASTBOUND's picture

my neighbor's half-sister makes $63 /hour on the internet . She has been out of work for 10 months but last month her pay was $16551 just working on the internet for a few hours. More Info... www.job-reports.com

ShrNfr's picture

Any more improvement in the economy and the median earnings will drop to $25,000 a year. Just because this blowhard siphons off big bucks does not mean the serfs are getting any. Quite the reverse.

DonutBoy's picture

Lighten up, and buy a Chevy Volt and a new house.

angel_of_joy's picture

The FED must have some sort of negative selection process for their members. The dumber, the better...

DullKnife's picture

Things are getting better for THEM (and their buddies). Just not for the "little people.

Things would get better for me too, if I could also print unlimited piles of money.

Then I too, would be optimistic (and rich).

But alas, I am not one of THEM.

Rather am one of US, the "little people".


angel_of_joy's picture

Maybe. But most of them would look smarter if they would just shut up...

Bioscale's picture

What difference does it make?

Bill of Rights's picture

Joseph Goebbels I presume.

disabledvet's picture

Yeah, no shit. "Mass death is really a good thing!  Its great news that you voted for your own annihilation! Now ponder a world where Wall Street is running everything into the ground..and then call it great news! What's the problem!"

espirit's picture

Williams has latent stand-up comic tendencies.

Jack Sheet's picture

Open up the Bic Mac package and there is a diarrhea- burger inside.

madcows's picture

Bulltard Baffles with Bullshit.  He's got more mood swings than a pregnant bipolar pubescent teenage girl.

Uber Vandal's picture

Usually I find myself saying "things keep getting better and better" as it is raining shit on me, and then something worse happens.

CrimsonAvenger's picture

Anytime someone starts a sentence with "I'll be honest," understand that the rest of the sentence is an absolute lie.

nakki's picture

"Take this quarter, go downtown, and have a rat gnaw that thing off your face! Good day to you, madam." I know its a microphone but that's all I could think of when I saw that picture.

sodbuster's picture

HaHa- first thing I thought was-"Whats that piece of shit on the ass-end of that wart?"

limacon's picture

"Passing floors 13 , 12, 11 and all is well !"

mademesmile's picture

He's right you know.  For the .01 percent, which is all the FED cares about, it's never been better. They just can't grasp why other Americans aren't buying assets.


astoriajoe's picture

I wonder what metric they use to quantify bullshit, as their compensation is obviously tied to it.