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Deutsche Bank: "If The Fed Stick To Their Script Then The Market Could Be In For A Small Shock"
The only preview you need of today's first FOMC statement for 2015, one which has already cornered Yellen as any additional USD strength from here on out will certainly be economy and S&P500 negative, and who as Deutsche summarizes is damned if she does, and damned if she doesn't, and that as Jim Reid politely puts it, "something will have to give at some point."
From DB's Jim Reid:
One wonders how careful the Fed will be in 2015. We may get some early clues today after the conclusion of the first FOMC meeting of the year. This meeting isn’t going to see the release of the Fed’s Summary of Economic Projections, nor a press conference but nevertheless it will be interesting to see the Fed’s January statement. DB’s Peter Hooper expects that the Fed will use this meeting for some "necessary housekeeping? with just a few small language changes as he thinks the economic picture has changed moderately but not enough for any significant changes to be made. To sum up, Peter expects the statement to be much like December's in which the Fed’s message was that as long as the labour market continues to show improvement and they continue to project inflation returning to 2% over the next few years (as indicated in their December forecast) the lift-off for Fed rates could begin around the middle of this year. Peter takes this to mean sometime between June and September and most likely June so long as (1) core PCE inflation falls at most another tenth or so in the near term, (2) wage inflation is showing signs of rising, (3) survey measures of longer term inflation expectations are holding firm, and (4) employment and unemployment continue on their recent favourable trends. He thinks that if core inflation drops by several tenths this could push the first hike out a meeting or two.
If the Fed stick to their script then the market could be in for a small shock. Market-based measures of the first Fed hike place it at around the October meeting. This is already one meeting later than was being priced in at the start of the year. After this the second hike is priced in for around March 2016, whilst we entered the year pricing in the second hike for December 2015. So there is room here for volatility as we approach the summer FOMC meetings if the Fed’s message remains unchanged. It has long been our view that the Fed will struggle to hike as soon as it wants to given global growth and inflation issues, however there's no doubt they are keen to pull the trigger so something will have to give at some point. So any evidence either way today will be interesting.
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Most importantest Fed statement EVAH!
I'm practically giddy with excitement.
You/we still haven't learned a thing these past 6 years.....disappointed will be the end of the day.
Nope.
They raise rates sooner than later cause there's way too much noise about this issue so it must be coming soon.
It's like a freight train.. The louder it gets, the sooner it hits you!
Prep bitches, The Federals, always wrong, but never in doubt.
And Deutsche Bank is ready having the largest amount of Derivatives in the existing world....
JeWellen: "Global events are threatening the ability of parasitic, leech-like Jews in Finance, Banking & on Wall Street to maintain their oligarch lifestyle. Extraordinary patience, ass-kissing & taxpayer & saver anal-raping is required."
"Mark-its" soar.
The Narrator: You walk into this room at your own risk, because it leads to the future; not a future that will be, but one that might be. (Camera pans to Narrator) This is not a new world: It is simply an extension of what began in the old one. It has patterned itself after every dictator who has ever planted the ripping imprint of a boot on the pages of history since the beginning of time. It has refinements, technological advancements, and a more sophisticated approach to the destruction of human freedom. But like every one of the super states that preceded it, it has one iron rule: Logic is an enemy, and truth is a menace.(Camera switches to the convicted man) This is Mr. Romney Wordsworth, in his last forty-eight hours on Earth. He's a citizen of the State, but will soon have to be eliminated, because he's built out of flesh and because he has a mind. Mr. Romney Wordsworth, who will draw his last breaths in the Twilight Zone.
I don't know how many times I have watched that episode over the past 40 years, but I do know that it never gets tiring. Perhaps because the message is timeless.
ZIRP FOREVER BITCHEZ!
Deal with it: http://matchbin-assets.s3.amazonaws.com/secure/users/4166071/assets/H26Z...
...Since the last one and until the next one!
DavidC
Lol, did someone say "Small Shock?" (Funniest thing I've heard all day.)
More like "a small cock"; as in Yellen's...
Fed busily word-clouding hoping it can sculpt up some words which will confuse things enough to ramp stawks.
Small shock = "catastrophe". Fed Evans
You beat me to it, I was like wow, what a gross understatement... :D
Raise those rates! Crush their the "hopes and dreams". I want to eat popcorn and watch "algo's gone wild"...
Not going to happen, theyre never going to raise rates. If anything, we are going full retard = NIRP
Agreed, the Fed has painted itself into a corner.
DavidC
I only wake up for big shocks.
ps.
Please read that last word correctly.
Worried about those trillions in derivatives on your books are you douche bank?
They were.....not so much anymore.
Life moves pretty fast.....if you blink......you missed it.
http://www.zerohedge.com/news/2014-12-12/presenting-303-trillion-derivatives-us-taxpayers-are-now-hook
My best guess a the Fed's word smithing for this meeting: you should have "considerable patience."
We'll be told we need the patience of a granite statue.
I'm going with "constrainable patience"
Levitate....use magnets if you must
"Please do not look at the ECB,EU or Greece, is unimportant. Look at the FED !".
Suggest those unfamiliar to this propaganda read "The Boy Who Cried Wolf".
This is what it is like to read or listen to the esteemed Federal Reserve, or anyone associated with that cabal.
They are pulling the plug, pump and dump, they already pumped . . . and now in order to dump they need to jack up rates.
This way when the insiders sell/dump their massive load of horse shit into the markets onto unspecting millenials "investing for retirement" they can blame the impending crash on higher interest rates, which after the cascading defaults and wealth confiscation (foreclosure of real assets in exchange for worthless bank notes) will give them round two of QE (Pumping) as a ramp-up for the next dump cycle (where more wealth confiscation from the public to banks) will happen , and this cycle will repeat until and I quote
Pure and simple
The primary business model of central banks is to impoversh the country they operate in, first by inflation (since all money is debt, inflation from a central banks perspective is DEBT CREATION) or getting as many people into debt as possible. . . then through deflation (jacking up interest rates) you create a currency short-fall (not enough money in circulation for everyone to pay their debts) this forces assets to be exchanged from the public to the banks.
And this cycle rinses and repeats until the public has no wealth/very little wealth and ends up "renting" what was once their house from "the bank".
INFLATION = ENCUMBERING ASSETS WITH DEBT BY ISSUING COUNTERFEIT CURRENCY LOANS FROM MEMBER BANKS ONTO PUBLIC
DEFLATION = CREATING CURRENCY SHORT-FALL TO CAUSE CASCADING DEFAULTS AND ASSET FORFEITURE (Banks Steal all the shit they "lent" against)
Gold is the Currency of Kings
Silver is the Currency of Gentlemen
Barter is the Currency of Peasants
Debt is the Currency of Slaves
Criminal Banksters / Politicians are you listening? Do I have your attention?
Guns are / is the Currency of Patriots.
It's always about the bucks, everything else is just conversation. ~Gordon Gekko
Man looks in the abyss, there's nothing staring back at him. At that moment, man finds his character. And that is what keeps him out of the abyss - Lou Mannheim
If you need a friend, get a dog.
I don't go to bed with no whore, and I don't wake up with no whore.
if they don't print the bankers will die
.
The Fed has already said that its decision will be data-driven. The fed is therefore trying to predict when the economy will be good enough to raise raties.
The Fed has no idea when the economy will be good enough. NOBODY has any idea.
The fed, wall st, the media, the govt are all trying to paint a rosy future. Hockey stick palm readers.
What the fed, the media and wall st are trying to do is convince people to invest and risk their money. I aint doing it. Period.
I am in cash and will remain so.
When the market crashes, as it must do in a system that can only be defined as a deliberate bubble and deflate system, THEN I will buy growth stocks.
Yellen et al will do whatever it takes to remain darlings of wall st. That is how they will remain in the news and become more famous. That will then lead to millions in speaking fees after retirement.
But being a wall st darling is not going to change the fact that this is a pump-bubbles system. And such a system MUST deflate periodically.
I will be waiting.
x
Negative Rates, Quantitative Easing and Bullard… forever… Yaay!...
Only when everyone wants out of the US dollar and it's free-falling will Yellen and the rest of the Federal Reserve's money printers be forced to raise rates. At that point it won't work very well.
The Federal Reserve is now infested with all money printers.
Agreed. That is what motivated Volcker. Inflation was rising due to relinquished dollars from around the globe. Saved it by hiking immediately. As long as most all countries using it, no problem. Easier to hold on now because the Euro, Yen, Pound are captives. The fact that smaller players, Iran, Russia, Turkey, etc. using other currencies does not dent the dollar as much as Japan and Europe. The Euro was founded for currency control period. The Fed could probably play this game for a long time.
Now it is priced in for 4th qtr. How many articles do I need to reference that say 1st. qtr. 2015, then 2nd, then 3rd. Now it is 4th.
Sounds more and more like that raise I was promissed at work.
Looks like Peter Schiff is right again. They are never going to raise rates.
When some analyst said LONG TERM rate rising cycle he ment it. This could go on for years unless China were to rock the boat.
I think it's pretty obvious what will happen. The Fed will raise rates by 1/4 point 2, 3 or maybe even 4 times (though I doubt it), and then when things start to come apart at the seams they will drop them again, probably all within 6 months.
Rinse and repeat.
For the next 20 to 30 years.
I think it will be 0.25 by mid-year, then nothing until next year.
Here is your answer on the pending rate hike:
Once there is world peace.
Now we know for sure what is not going to happen--A small shock. The process of elimination leaves a large shock or no shock at all.
I'm still thinking mid-year.
Jeezus! These now daily crash-and-burn posts crack me up. So far not one of these wiz-bangs appears confident enough to call when and what to trade for a renumerative apocalypse. Although I'm in the choir, I'm really tired of the worthless sermons.
Why dontcha tell me something I don't know Deutsche-douche?
Same ol, same ol...I have been waiting for something to give for awhile. The only thing that matters anymore is what outcome algos wish to achieve, one nanosecond at a time. carry on...