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JPMorgan Warns, Don't Expect Recent Market Volatility To Alter Fed Tightening Path
Via JPMorgan's Mike Feroli,
A quick Fed update
The recent increase in financial market volatility has raised some questions about any rhetorical response from the FOMC tomorrow. While we see some risk of this occurring, we think the most likely outcome is that the Committee refrains from highlighting the latest flare-up in the markets.
In particular, we think they will still drop the 'considerable time' language while also indicating they are in no rush to raise rates.
For a historical guide to the Fed's thinking, we don't have to go too far back; the minutes to the October 2014 meeting -- which occurred shortly after a jump in market stress -- laid out how they viewed the appropriate rhetorical response. The minutes read:
"members considered the advantages and disadvantages of adding language to the statement to acknowledge recent developments in financial markets. On the one hand, including a reference would show that the Committee was monitoring financial developments while also providing an opportunity to note that financial conditions remained highly supportive of growth. On the other hand, including a reference risked the possibility of suggesting greater concern on the part of the Committee than was actually the case, perhaps leading to the misimpression that monetary policy was likely to respond to increases in volatility. In the end, the Committee decided not to include such a reference."
Of course, if the recent move in asset prices does imply "greater concern on the part of the Committee," then the October comparison is inappropriate. Our best guess, however, is that their concerns have not materially increased. The ruble doesn't matter for the US economy. Lower oil prices and interest rates are good things. The most obvious bad thing is the widening in high-yield credit spreads. But note that in the most recent discussion of financial stability risks in the Monetary Policy Report, the Fed highlighted narrowing credit spreads as a sign of heightened risk-taking -- a concern which was echoed in the staff's latest assessment of financial stability risks in the October minutes. We think it would be odd for the Fed to pivot from repeatedly warning of excessive risk-taking in corporate credit markets to warning about excessive risk aversion in those same markets. Thus we don't think this will merit a mention in the statement.
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Vol is good for ya.. and for traders to stretch their wings.. Especially if oil drops to 20$...
http://hedgeaccordingly.com/2014/12/andras-vig-of-source-research-histor...
If you're going to poach the top comment at least come up with something funny that other ZHers might get a kick out of.
JPMorgan Warns, Don't Expect Recent Market Volatility To Alter Fed Tightening Path
It won't. That path is ZIRP to Inifinity & Beyond...
Okay, I QUINTUPLE-DOG-DARE-YA! RAISE RATES, YELLEN!!!
[See? Russians can do it; we can't...]
"The ruble doesn't matter for the US economy".
and this bozo is making the big bucks supposedly for his brains?
things do no happen in vacuum stupido!
i surely do not know what it is, but it is certain not a single event ... more to come and soon will see ...
Hey now! the shit is contained man, just like subprime was. Relax.
I'm hoping for a new [better] ZH comment system for 2015. Would that be too much to ask?
Hell, just remove the indenting so I can read on a phone. Or implement a max indentation level. There are some pretty easy ways to fix it.
The fix is in.
Watch the headfake.
Remember the bitch speaks at 2:30.
Whipsaw your nuts off.
Unless you are damn good.
yup.......granny will goose the spoos
Remember kids, when the morgue speaks, the exact opposite is true.
The Fed is out of ammo. The world is awash with liquidity, and interest rates are ZIP.
They are useless by standers, at best. Thanks, Ben Shalom.
I hope you're right but don't you think it's a bit too early to underestimate the devil's hand? Amazing how much time printed money has been able to buy so far.
Backstabbery is always foremost on their pea brains,
but I did say "at best". ;)
lol, sorry missed that qualification there. I see the word "control" in our future often in combination with "capital" and "price".
Kaiser- backstabbery implies they would even have emotions about what they're doing and who it affects positively or negatively. They simply don't care what happens to you or me. They have their playbook and they're running it. Period.
No worries, Mr. Bowl Cut Yellin has the Bernanks back....
Tits on a boar.
Oh wait...
"they are in no rush to raise rates." ofcourse they are
So what you're saying is recent market volatility will alter fed tightening path, gotcha.
how the fuck did a private bank become the sole holder of america's purse`strings. we are not a republic but an elected dictatorial`fascist anomaly...
"we are not a republic"
We have become a Banana republic.
That's unfair to real Banana Republics...
I love it when you have one too many wines.
fucking kikes, don't play the game...time to round them up and exterminate them again, or maybe it's too late?
Jesus! How bout we try honest money first, before we go all in hitler? Like Rddney Dangerfield said in "Back to School", I'm a lover not a fighter.
lol... ok, let's try "honest money" ... give you 9 months - then we can start with my plan ?
A prerequisite for working at J.P.M. is that you're able to self levitate and do 360s with your head.
Oh wait, you meant the head outside your pants...
That is one ugly Zionist bankster.
I would bet all freight trains near her house take dirt roads.
An American, not US subject.
"No debate, she goes into the guillotine face down. Her and Reno."
Fuck you JPMorgan. Fuck you Yellen.
"JPMorgan Warns, Don't Expect Recent Market Volatility To Alter Fed Tightening Path"
Yeah, sure.... More BS!
QE 4 coming in 2015 as the Fed starts to realize the rest of the world is in a downturn.
Don't think the Fed will want to join that path.
The Fed won't and can't raise rates. Just QE on or off.
All I know is that gold will get shellacked
The Ruble doesn't matter to the Ameican economy?
WTF? I have never seen a currency crisis that didn't Impact us. I've seen smaller currencies almost tip over the apple cart and there has never been more counterparty risk in these interconnected financial markets than there are now. Arrogant pricks.
Relax, Doc,
this time is different.
Hope so, 'cause the Thai baht nearly sank us.
On the brighter side, London RE should become more affordable.
I just found the perfect theme song for Old Yellen... ? Ozzy Osbourne - Bark At The Moon - YouTube
Bark she does.
Mickey Rourke's bad plastic surgery job looks better than Old Yellen.
Must be true 'cause they make up half the FED.
The Fed's not gonna do shit. THE END.
Well this bugs the shit out of me now. Always go the opposite of mouthy banker scum. But I was thinking now is the time for the Fed (bankers) to crash it. They r out. No one left but retail/pensions/401k to hold the bag. Then, they come in on Massive QEwhatevernumber we r at now and buy shit on the cheap.
Today quite a lot of people panicked. Therefore I really don't think the FOMC matters anymore. Who cares about their "policy measures" that didn't fix anything over the last 6 years? What do they want to do now? More of the same crap?
We're heading off the cliff and no "bla bla" can fix it at this point.
Sorry, Janet et al
Get to work Mr. Bullard!
Mr. Yellen, you go right ahead and raise rates, asshole. Go ahead and try it. BTW you've just recently cut off another source of USD dumping, i.e. Russia. So go ahead and raise rates, now more than ever. Do it, fucktard.
f the fed con artistry
put that in a basket.
sell the thing that stifles me
sell me in a casket.
.
anyway ....
the fed, tighten.
really? tighten what? when?
blow me.
When they say "tighten" it's comparable to taking a couple of teaspoons of Pepto-Bismol to cure Fukushima powered Obolarang diarrhea.
she is going to lay down on the table and spread her legs and give birth to a money printing machine, in front of the cameras so the whole world will see. you heard it here first.
Exterminate the kikes again...it shocked me to see how strongly that statement was supported by others. I would think one might rather keep such thoughts to one's self, all I'm saying. Having said that, I can say I have honestly never actually met one I truly liked. I really wish I had, honestly.
So, in other words, JPM tells the Fed what to do.