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FOMC Minutes Show Patient-er-For-Longer, "Foreign Risks"-Fearful Fed
The January statement had only modest changes so reading the tealeaves of the FOMC Minutes 'should' provide little additional color with the main focus on the meaning of 'patient', fears over 'international developments', the 'right' gauge of inflation, and pace of rate lift-off...
- *MANY FED OFFICIALS INCLINED TO STAY AT ZERO LONGER: MINUTES
- *MANY OFFICIALS FELT DROPPING `PATIENT' MAY LEAD TO DATE FOCUS
- *MANY FED OFFICIALS SAW RISKS IF FOREIGN WEAKNESS WORSENED
- *FED OFFICIALS AGREED POLICY SHOULD STAY DATA DEPENDENT
It appears The Fed is 'worried' again... lower for longerer...
Pre-FOMC Minutes: S&P Futs 2091.25, 10Y 2.122%, Gold $1201.50, WTI $52.05
* * *
It's been a good 3 weeks for stocks and oil since The FOMC Meeting...(and not for Bonds and PMs)
Additional headlines:
- *MANY FED OFFICIALS INCLINED TO STAY AT ZERO LONGER: MINUTES
- *FED OFFICIALS AGREED POLICY SHOULD STAY DATA DEPENDENT
- *FED SAYS CONTINUED TEPID WAGE GROWTH COULD RESTRAIN SPENDING
- *FED EXPECTED STRONGER DOLLAR TO BE PERSISTENT DRAG ON EXPORTS
- *A FEW FED OFFICIALS NOTED RISK DOLLAR COULD STRENGTHEN FURTHER
- *FED MINUTES NOTED RISKS FROM CHINA, MIDEAST, UKRAINE, GREECE
- *FED OFFICIALS SAW RISKS TO OUTLOOK NEARLY BALANCED AT JAN. FOMC
- *FED OFFICIALS SAW RISKS TO OUTLOOK NEARLY BALANCED AT JAN. FOMC
- *MANY FED OFFICIALS SAW RISKS IF FOREIGN WEAKNESS WORSENED
The key sections from the minutes:
Many participants indicated that their assessment of the balance of risks associated with the timing of the begin-ning of policy normalization had inclined them toward keeping the federal funds rate at its effective lower bound for a longer time.
Not everyone agreed:
Some observed that, even with these risks taken into consideration, the federal funds rate may have already been kept at its lower bound for a sufficient length of time, and that it might be appropriate to begin policy firming in the near term.
But even the Fed knows that many > some. Still, can't backtrack fully now while the facade of the US recovery is about to crash and burn, so the Fed has to do it step by step.
Regardless of the particular strategy undertaken, it was noted that, provided that the data-dependent nature of the path for the federal funds rate after its initial increase could be communicated to financial markets and the general public in an effective manner, the precise date at which firming commenced would have a less important bearing on eco-nomic outcomes.
It gets better: the Fed no longer has any idea what indicators to point to in order to keep rates at zero with the S&P at 2100:
There was wide agreement that it would be difficult to specify in advance an exhaustive list of economic indicators and the values that these indicators would need to take. Nonetheless, a number of participants suggested that they would need to see further improvement in labor market conditions and data pointing to continued growth in real activity at a pace sufficient to support additional labor market gains before beginning policy normalization.
In other words, just like porn, the Fed will know a recovery when it sees it.
And here is something odd: apparently the Fed and the BLS don't look at the same data:
Several participants noted that there were signs of layoffs in the oil and gas industries, and that persistently low en-ergy prices might prompt a larger retrenchment of em-ployment in these industries. In addition, it was ob-served that if capital investment in energy-producing in-dustries slowed significantly, it could damp the overall expansion of economic activity for a period, especially if the slowing took place after most of the positive effects of lower energy prices on growth in household spending had occurred.
Lastly, none other than the Fed now appears displeased with the definition of inflation, or as the case may be, deflation:
A number of participants observed that, with anchored inflation expectations, the fall in energy prices should not leave an enduring imprint on aggregate infla-tion. It was pointed out that the recent intensification of downward pressure on inflation reflected price move-ments that were concentrated in a narrow range of items in households’ consumption basket, a pattern borne out by trimmed mean measures of inflation.
We could go on but the gist is clear: the Fed has no idea what it is doing, and finally realized with the entire world lowering rate, the Fed simply can't hike.
And with that, German and Japanese pension funds are delighted they can resume buying Treasurys.
Full Minutes:
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Up Up and Away, bitchez! BTMFATH!
Mr Yellin to Savers: Fuck you some moar, buy Z instead.
The motto for the FOMC is the same as the Cosmopolitan's slogan:
"Just the right amount of wrong."
http://www.wsj.com/articles/blackstone-looks-to-buck-the-odds-on-vegas-s...
Nothing but TALK TALLK TALK TALK TALK TALLK TALK TALKTALK TALLK TALK TALKTALK TALLK TALK TALKTALK TALLK TALK TALKTALK TALLK TALK TALKTALK TALLK TALK TALK, LIES LIES LIES LIES LIES LIESLIES LIES LIESLIES LIES LIESLIES LIES LIESLIES LIES LIESLIES LIES LIESLIES LIES LIESLIES LIES LIESLIES LIES LIESLIES LIES LIESLIES LIES LIESLIES LIES LIESLIES LIES LIESLIES LIES LIESLIES LIES LIESLIES LIES LIES followed by more TALK TALLK TALK TALK TALK TALLK TALK TALKTALK TALLK TALK TALKTALK TALLK TALK TALKTALK TALK TALLK TALK TALK TALK TALLK TALK TALKTALK TALLK TALK TALKTALK TALLK TALK TALKTALK TALK TALLK TALK TALK TALK TALLK TALK TALKTALK TALLK TALK TALKTALK TALLK TALK TALKTALK TALK TALLK TALK TALK TALK TALLK TALK TALKTALK TALLK TALK TALKTALK TALLK TALK TALKTALK TALK TALLK TALK TALK TALK TALLK TALK TALKTALK TALLK TALK TALKTALK TALLK TALK TALKTALK TALK TALLK TALK TALK TALK TALLK TALK TALKTALK TALLK TALK TALKTALK TALLK TALK TALKTALK making sure there is NO ACTION.
The fed will be patient indefinitely. They will never again raise rates substantially. They will do anything, including directly buying stocks, to prevent this bubble from popping.They are all in and betting against them is futile. Don't be surprised if the fed owns the same percentage of US stocks as they do treasury debt at some point. Economic survival depends on it and they know it. I wish it were not true, but I strongly believe it is.
Agree. its QEternity, and they have to cross Hell first to get out.
So, to help them keep from crossing the plains of Hades, Belgium (who's GDP is about equal to Belize) will also buy treasury bonds indefinitely.
Problem solved.
They will never again raise rates substantially. They will do anything, including directly buying stocks, to prevent this bubble from popping.
But here's what i don't get. if they stay the course they pop the bubble by default because the squeeze on consumers gets worse. They did the helicopter drop from 2008-2010 and it kinda worked. Money was in consumers hands and they spent. Of course they did pay down debt, but the boost to consumer spending was tangible. Then they went QE'tard and instead of trickle up, we got this trickle down asset inflation. Ultimately monetary policy can only do so much and it seems not raising in 2015 only accelerates a chaotic crash. If you COMPLETELY remove price discovery from the economy, which your thesis would do, what is left of "markets" would destroy themselves and you'd have a "political" solution ala Greece in very short order.
I think everyone will agree we're in for some major changes. But if the FED doesn't begin some semblance of normalization soon the confidence game is over. if that happens things are going to get REALLY messy REALLY fast. Does Mr. Yellen really want the Big 4 banks to endure that outcome?
Price discovery is gone or perverted beyond normalization. There is no going back. So, they will just do whatever needs to be done to give the appearance of normalcy. Priority number one is keeping equities up or the ponzi scheme implodes. Price discovery is the last thing they want.
They may be able to keep stocks levitated but price discovery sure is picking up steam in the energy and RE markets. The real stuff that people consume and use in the economy is a lot harder to control long term. Sooner or later supply and demand overrides monetary shenanigans. And with all those shenanigans designed to push prices upward, there's only one way to go when they fail...
DOWN
I fully expect ww3 to begin right beore or shortly after they lose control...I doubt they care much about long term
Since the shadow of crisis has passed, time for NIRP and more QE to water the green shoots everywhere.
LOL!!!
is there anyone that actually thinks the Fed will raise rates prior to QE 4 EVAANDEVA?
Whatever the fed is going to do, I'll believe it when I see it. They're in a no-win situation. Expect stupidity.
Stupidity would be an upgrade wih these ass clowns.
You make a fair point, Doc.
It's not just stupidity, Doc, but also the fact they are the largest theiving, criminal enterprise in the world.
I am Jack's complete lack of surprise.
+1.
Make soap.
Fed can't halt deflation.
And here comes the fade.
Deflation is good for stocks? Right?
bullshit...................................
There is truth to the fact rates can not rise.
FED EXPECTED STRONGER DOLLAR TO BE PERSISTENT DRAG ON EXPORTS
This means treasury debt, it's a drag on selling USTs because they are moar expensive in other currency.
I can taste that reuben already. Lest we forget:
"There will be no rate normalization in my lifetime"
The Bernank
Nothing like a good Reuben Doc, fantastic choice!
pods
Unfortunately I have to wait until January to collect. That is unless NoDebt would like to concede early.
Are you gonna finish those fries?
Yes, they are liars and have no cred. They are dupes and terrorists. They are murderers and thieves. Surprised they have been "hinting" at a rate hike when there is no rate hike in sight?
Managing expectations...
Dead patient managers...in the fiat morgue.
the long TSY trade into these FOMC minutes was the easiest trade I've seen since the long equities sept 2012 trade.
everything is becoming so obvious now, CB's have painted themselves into a corner and are looking around in a panic cuz they don't know what to do next.
bullshit, they will never raise rates... NEVER
"Fed said to consider first rate hike sometime in early 2034."
They should say 2050 to make it more believable and boost stocks.
There only plan is the stock market.
It's Zimbabwe and bust.
just in '34....gives them some wiggle room...2034, 2134, 2234 etc...
I say 2029 so it can coincide with the 100 year anniversary of the Great Depression
These fed members' obsession with words like "patience" show how stupid and clueless these dumbfucks are.
You can delete this "obsession with words like "patience"" and still be 100% accurate.
"These fed members' obsession with words like "patience" show how stupid and clueless these dumbfucks are."
Somehow they ended up with all the money and power. So they can't be that clueless.
A strong argument can be made that their market participant subjects are the clueless ones, clinging to their carefully calculated incessant stream of ponzi lies.
"Somehow they ended up with all the money and power. So they can't be that clueless."
Yeah, so does royalty, it doesn't make them geniuses.
They are never going to raise rates in any significant manner.
Just think what the outcome is if they can get all the Federal Debt to have negative interest rates.
Given enough time, it pays itself off, like magic.
of course the s&p is green on this. must get aapl up on the day at all costs in this joke of a ''market''
markets respond with immediate vertical ramp.
FED stays easy for an extended period of time.
What's that mean? More company stock buybacks with borrowed bucks of course.
To theMOON Alice.
...but but so does gold!?
There is increasingly not a chance in hell that rates will ever go higher.
The Yellen Fed has only one thing in mind. They must keep the Dow above 18,000 while Ovomit is still in office. It's the only thing he has left to brag about, as the idiots who voted for him equate a soaring stock market with a strong economy.
All the TBTF algos trade on key Fed words.
The Fed makes sure they say these key words to get the market trader bots to respond.
risk to who...crooked bankers or patient savers. How about you give me that money for free and I am going to corner the stock & commodities market...and then pay myself with millioon dollar bonus.
WHAT FUCKING DATA...everything is multiple points lower than their first annoucement.
BREAK UP THE CRIMINAL ENTERPRISE FORMALLY KNOW AS INVESTMENT BANKS
I wonder how long it will take the pundits and "professionals"to figure out what we have known all along...... There will be no rate hikes, we are Japan.
And they laughed when Peter Schiff said there would be no rate hikes....
http://www.newsmax.com/Finance/Schiff-Fed-quantitative-easing/2014/10/09...
Dead patient non-responsive to further fiat injections.
Coroner Dr. V arriving from Greece soon and expected to cancel the re-animation attempts.
News at 11.
Since we all know they can't raise rates, is all the bad data, good again? A .25% raise in FED funds rates would surely bring this house of cards down.
We are so fucked that if I did have student loans I'd just stop paying. This is the message that the entire world is telling its youth. Loans are just something you borrow against to pay off the first loan you can't pay off.
Bullish!
And they managed to keep it managed.
https://www.tradingview.com/x/PG2VOB0K/
yellen needs markets as high as they can go, because 1,2,5y yields have been pounded and are bouncing back with a vengeance.
coupon rates are heading up and yellen has nothing to say about it anymore - the best yellen could do was blow her brains out to influence rates.
back to reality very soon.
The reason they will never get off zero is simple.
They cannot.
The re-animator is giving up hope on the dead patient.
Dr. V has illuminated the dismal progress in the back rooms.
*MANY OFFICIALS FELT DROPPING `PATIENT' MAY LEAD TO DATE FOCUS
My theory is that the everything is awesome narrative is dependent on hearing that the economy is doing so well that they'll hike the rates tomorrow. Avoiding "date focus" is an attempt to not "paint themselves in to a corner" by making tomorrow a date anyone can mark on a calendar.
tl;dr - a 5 year old could spin a better yearn than this
So is this bullish that rates will stay lower for longer, or bearish that the recovery is not happening?
Alles bullishkeit.
Reading the Fed minutes has become like when the missus comes home from shopping and announces, "you won't believe how much money I saved you today!"
Should say "lowerer for longerer".
Japan was an industrial powerhouse and they were able to raise rates RIGHT? Well the US is "Exceptional" so surely we can too.
Credibility? We don't need no stinkin' credibility.
I think the only thing they discuss at those meetings is how to word the next bullshit statement.
It is another type ot "two-lip" mania.
They are all into their bi-labial fricatives now.
It is now post time bitchezzzz
All we can be certin of is that this news will propel stocks to new all time highs and crush the price of any actual asset.
The same as any other news, "good" or "bad".
What the FED just said is that the ENTIRE world is insolvent. The only plan they have is to let corporations borrow more money (more debt) to repurchase shares as opposed to growing their businesses. 6,7,8,20 years won't be enough (Japan), that's all that's left. Extend and Pretend. This plan to funnel as much money to those that don't need it is insane and at some point might really come back to bite them in the ass.
When does brain death occur in the patient ?
I think Greece's Dr. V has called it recently.
Brain death is the complete and irreversible loss of brain function (including involuntary activity necessary to sustain life).
This Fed is actually 5x worse than the Greenspan Fed where he lowered rates right through the late 90s stock market bubble claiming he was worried about Russian debt, the Thai bhat collaspse and currency crisis that led to LTCM, then he put more juice in because he was worried about Y2K computer glitches, then again after 9/11, then the stock market crashed and he lowered rates again, setting up the final blow off of a real estate bubble that was already well along.
These guys will find ANY excuse to keep channeling free money into the system until the bubble gets so big it pops.
So, will a PM stack be worth more or less in the short term? That is, in the next few weeks or months, not sometime in this geological epoch. Yes, I mean in dollars or whichever fiat currency. If a stacker who hasn't the luxury of vast aeons of time is forced to sell some or all of his stack to pay critical medical bills, will he get more or less for it down at the coin shop?
As predicted a couple of months ago, low oil's risks to Euro-area Fed Owner banks will dampen any desire to raise rates.
ALSO...
Is it just me? Or does it seem that the Fed is intentionally telegraphing that it will raise rates in a rolling forward window with the expectation that there is a recession coming on???
A recession is certainly due for purely cyclical reasons. The normal path of recessions is to feel the first softness in March, then experience a mostly normal general sell-off in May, followed by lackluster buying or outright selling in September or October...after which they announce that we've been in recession since March.
The delay in identification is because of the tendency of markets to sell off during the summer regardless of whether there is a recession. "Sell in May and go away." In recessions the sell off may be a bit steeper than normal, but only becomes significant after too few people return to buy in the fall.
It is interesting to me how the Fed seems to 'AIMING' any discussion of raising rates until we would EXPECT softness to be showing.
Waiting for the eggs to hatch?
Or is it a cop-out, revealing that they always knew they couldn't raise rates?
I suspect the latter, if only because of the long stretch of months that they've been stringing us along...
(With apologies to H.P. Lovecraft)
That is not dead which can eternal lie (or be eternally lied *about* and jawboned ever-upward)
And with strange aeons even fiat may die ...
Trouble is, not all of us *have* aeons, either strange or familiar, to wait, with our carcasses parked contentedly, as snug and smug as Smaug on top of our dragon-hoards. Some of us have creditors insisting on being paid *now* (in fiat, not PMs), and they have the means to compel us.
I mean we also don't have the option of telling them, "Well, I'm just not gonna pay it."
They can expel our loved one from the nursing home. They can shut off our heat (in winter), lights, and water. They can evict us, turn us out into the street, and dump all we have there to be pilfered by crackheads and pissed on by dogs, or vice-versa.
They can have us jailed for this-or-that bogus charge. They'll just *call* it something other than debtor's prison. "Contempt of court," typically.