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"Flexible" Fed Loses "Patience"; Cuts Growth, Inflation Forecasts: Redline Comparison
Evan as The "boxed-in" Fed nears the vinegar strokes of its easing cycle, today's statement continued to offer something for everyone (hawks, doves, bulls, & bears) to hold onto:
- *FED DROPS PATIENT STANCE ON INTEREST-RATE RISE GUIDANCE (hawk)
- *FED SAYS ECONOMY `HAS MODERATED SOMEWHAT,' JOB MARKET IMPROVED (dove)
- *FED SEES 2015 GDP GROWTH OF 2.3%-2.7% VS 2.6%-3% DEC. EST. (dove)
- *FED WANTS TO BE `REASONABLY CONFIDENT' ON INFLATION FOR LIFTOFF (hawk)
So, despite previous Fed promises, we have seen dismal macro data, no consumption gain from low gas prices, and USD strength headwinds; and yet, as they shift growth expectations in their dot plot, we're supposed to believe that. The bottom line: Fed to Markets: "you're on your own"-ish: undertainty is back. Full redline below...
Pre-FOMC: S&P Futs 2059, EUR 1.0650, 10Y 2.05%, Gold $1152
Additional Headlines...
- *FED SAYS RATE RISE ALSO TIED TO MORE LABOR-MKT IMPROVEMENT
- *FED: RATE GUIDANCE DOESN'T MEAN FOMC DECIDED ON LIFTOFF TIMING
- *FED SAYS RATE RISE `REMAINS UNLIKELY' AT APRIL FOMC MEETING
- *FED SAYS HOUSING REMAINS SLOW, `EXPORT GROWTH HAS WEAKENED'
- *FED REPEATS INTL DEVELOPMENTS TO BE TAKEN INTO ACCOUNT
- *FED SEES 2015 GDP GROWTH OF 2.3%-2.7% VS 2.6%-3% DEC. EST.
- *FED SEES 2015 JOBLESS RATE 5%-5.2% VS 5.2%-5.3% IN DEC. EST.
- *FED SEES 2015 PCE INFLATION 0.6%-0.8% VS 1%-1.6% IN DEC. EST.
- *FED SEES LONGER-RUN UNEMPLOYMENT RATE 5%-5.2% VS 5.2%-5.5%
Here is what the major changes are:
- Fed notes that recent growth (no longer activity) has "moderated somewhat" instead of "expanding at a solid pace."
- Fed adds that "export growth has weakened"
- Fed removes measures of inflation compensation "have declined substantially" and replaces with "remains low"
- Fed changes "inflation is anticipated to decline further" with "remain near its recent low level"
And then when it comes to the patience language there is a whole lot of crazy stuff going on- for the full redline comparison see below.
* * *
Time to raise rates? Seems like the perfect time!!
* * *
This seemed to sum up The FOMC's decision-making process perfectly...
Timing by Committee pic.twitter.com/w92TJKelwN
— Not Jim Cramer (@Not_Jim_Cramer) March 18, 2015
* * *
Here is what the dot-plot looked (and market expectations) looked like before... (notice how much more dovish the market remains)

And after...
Word Count rise - bullish

* * *
Full Redline...
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Raise rates. I dare ya.
Fuck the steamy pile of shit fed !
Heads up for you TA-tards:
Parallel channel starting at the low Friday.
So.. S&P hits 2100 and then....
Holy shit. It is 1408 East coast time and the DOW that was down over a hundred just shot straight up around 200 points and is still going. When I say straight up I mean straight up. Absolutely in-fricking-credible. What the hell is happening?
Don't fuck with the algos.
What I said dude ^^^^^^
Even crude has went full retard. This is crudes 330 ramp time. Likely be one big fucking gap tomorrow morning.
Nahhhhhh...
wanna bet
Crude's up, in part, because the dollar is down, at least against yesterday's values.
All the Fed did was telegraph its intentions to never raise rates. Yellen's weasel words about just because we got rid of the word patience doesn't me we've lost patience tells me all I need to know. The economy is really no worse off today than it was a year ago. The only reason the Fed is mentioning a weakness now is so that in June and September, they can come out and say, "Gee, we WOULD have raised rates, but the economy is just too fragile right now". This buys them at least six months to a year before they have to even consider raising rates.
This kind of crap is what happens when you use bullshit numbers to describe your economy. 5.6% unemployment instead of at least double that. Low to no inflation when your market basket of goods can change at the whim of the government and excludes those pesky food items. But if you buy a computer every month, you can probably say inflation is down to non-existant.
I don't know what's worse.....using the bullshit numbers to describe the economy knowing they're full wrong.....or using the bullshit numbers because you really believe they're true. Sometimes I think they have really bought into the big lie and they really think the economy is (was) fine.
Frankfurt is on fire. Hopefully it will spread here.
Miffed
Must be because AAPL is now part of the Dow. /s
HTF can this be good for the markets? Only in an alternate universe. I know, I know, pay no attention to the man behind the curtain.
No interest rate hike means more free money for the banksters, which means good times are still here for them. Not so much for the 99.99% of course, but we don't count them.
Going higher than 2100. It's going to hit 2150 before bumping its head on the year-long overhead ascending trendline....Ultimately it wedges to 2200 before SHTF.
Exactly! Wtf? Anyone see that massive move here within fucking seconds/minutes! Again wtf???? Fucking cocksuckers... manipulation? Nah, doesn't exist here. Shit rains from heaven, great day on the market, city vaporizines, great day on the market, GDP outlooks down, great day on the market... what a joke.
Come join us for free at www.gunsgrubandgold.com
Rates could whether they like it or not. The Fed can only print for so long until the bubbles burst.
Might happen if a conservative is ever elected president.
Bwahahahahahahahaha....... A conservative president...... Lol, remind me again when we ever saw a "conservative" president who actually shrank government. A conservative president, that's fucking rich.
lol Doc, Whats even funnier is republicans preach smaller government but always want to expand the military. I swear the voters who support either democrats or republicans are retards. The last time I checked the military was part of the government. So if you shrink other parts of the government and expand military, you really didn't shrink government at all. I spelled it out for the slow ones.
Eisenhower was pretty good. High taxes kept the Oligarchy from buying and the expanding government. That's pretty conservative in my eyes.
Full retard jawboning alert.
Bang, to the moon, Alice!
Notice that no circuit breakers stopped the 300+ point change in value?
Full retard jawboning alert. Why would the fed raise rates when the banks can continue to Rob savers? Why would the Fed raise rates and in the process destroy their portfolio?
RE
They can raise rates; but it will just be incremental, at 10-20 bps, and not an actual rike hike.....you are right in that it CAN'T do that (like what Volcker did in the 70s).
Pace, not timing of rates, matters for Fed monetary policy; that's why this statement is bullish for yields and equities and is interpreted as dovish. Traders who don't believe that the Fed will take a drastic measure to raise rates were affirmed in their beliefs today. This is not your dad's interest rate hike.
BUT the reason they believe they can hike minimally (and they really only do so for show; they in their heart of hearts KNOW they need near ZIRP interest rates for the next 20-25 years...they just won't admit it) is because it will be OFFSET by major printing by other CBs like the BOJ, ECB, and BOE which will be needed in the falls as Europes and Japan slides deeper into deflation.
The CBs today, it's an octopus - and the Fed is the head. It can cut off parts of its body and replace them easily because of its reserve currency statis.
BUT once someone cuts off its balls though? It's game over. The black swan that causes this is the unknown variable.
A 1% FFR will collapse the economy into a Greater Depression and they know it.
The only thing propping this corpse of an economy up is the stock market bubble.
Agreed. I don't think anyone wants to look at another $180 billion being added to the federal deficit for debt service. And if rates go back to historical norms, meaning a raise to about 4.5%, you're talking about adding $810 billion to the annual deficit. And that's based on the nominal debt of $18 trillion. If they add in all the off-balance sheet items, the annual deficit doubles from the amount in the worst of the Obama budget years. In other words, we be fucked.
Patience, bitchez
Liesman just creamed his jeans with the rest of the All Star panel at the BlowHorn.
These people are fuckan delusional, not to mention totally dishonest and intellectually bankrupt.
The patient is dying, there will no be no rate hikes Dr.
No problem, the leeches will fix him right up.....
What a fucking joke our "markets" have become, everybody relies on one fucking word.
and that word is
criminal!
Free Corzine!
I thought bird was the word!
https://www.youtube.com/watch?v=aPrtFxd9u9Y
Damn I'm old..
No rate hikes, ever.
Damn, I was counting on 0.5% interest on my savings to retire on. 0.25% just wasn't cutting it.
More share buybacks, more student loans, more subprime car and home loans...
Let's get this party started!!!
No need to worry about interest rates. They´ll make sure your retirement is vaporized just before you need it. You´ll be working for food in your 80´s...or begging for it.
duo, you get 0.25%? Damn, where do I sign up? At our local bandits.....I mean banks, they proudly advertise the "High Yield Savings" at 0.1%.
Keynes and Krugman are walking. Keynes says, "I'll pay you $5,000 to eat a dog turd." Krugman does it. Keynes doesn't have any evil savings and didn't think Krugman would do it: The next day he begs for the money back. Krugman says, "I'll give it back if you eat a turd." Keynes does it. Krugman says, "That was stupid: No one made money and we've both eaten sh*t." Keynes says: "But we boosted GDP by $10,000." - Teal
Wow, thats a shocker------ NOT !! they will never have the gonads to raise sheeeit..EVER..
MOAR for longer!!!
Pump it up, baby! Free money lives!!!
The fed. is going to raise rates when the UE is 3.5% and the Participation rate is 60%. </sarc>
Fuck the rates, give me some FREE money....
Club members only. Sorry Charlie!
Stocks go vertical?! I thought the only reason we were here was b/c of the free money used for buy-backs?
From the looks of the equity indices, it looks like this decision was leaked about five minutes early.
Straight up from 1:55 ET. Over 250 points from the LOD printed about 20 minutes prior.
Impressive. Not to mention bullish. But I just did.
You gotta admit though, that's one helluva spike.....
Now they are all DOVES?
Where the fuck is Dick Fisher!
I prefer to call him Fish Dicker.
If the old adage "the first move after FOMC is usually a head fake" is correct, there is going to be one epic dump later today.
I will have my popcorn ready around 3:30pm?
the move started 15mn before the release... but let's wait and see...
I have to agree with you, but I dont know the agreement is because that is what I hope it happens or because you are correc. From my perspective all the news is bearish in a sense that it points to increased rate. Saying the decision is going to be based on employment related news and yet predicting that the unemployment will go down
I have to agree with you, but I dont know the agreement is because that is what I hope it happens or because you are correc. From my perspective all the news is bearish in a sense that it points to increased rate. Saying the decision is going to be based on employment related news and yet predicting that the unemployment will go down
So PATIENT is out --- wait and see is in!
can somebody explain what just happen on DOW SP and NASDAQ? from -110 to +80 in 3 seconds!!!
WHF?
this is insult to my intelicgence!
The junkie just got another dime bag. He might die tomorrow, but tonight he'll get higher than 10 hippies.
Its simple. This morning and early afternoon the traders were a bit skiddish about the drug dealer showing up this afternoon.
He showed up at 2pm...all is well- Party on-- snort and then snort somemore
According to Natixis:
http://www.ge.tt/5osnEOC2/v/0?c
March 13, 2015
What are the differences in economies where debt ratios are very high?
Debt ratios (public, private and total) are at present extremely high in a vast majority of OECD countries. How does this change the functioning of these countries' economies?
• Fiscal policy becomes more restrictive and can hardly become very counter-cyclical due to high public debt ratios;
• The private sector deleverages, and monetary policy can no longer use the credit channel;
• Central banks have an incentive to conduct expansionary monetary policies to facilitate deleveraging.
In countries where debt ratios are very high, we can therefore expect to see:
• Weaker growth (a restrictive fiscal policy, private-sector deleveraging);
• Deeper recessions (lack of counter-cyclical capacity of fiscal and monetary policies);
• And yet a sharp rise in asset prices (equities, real estate), due to expansionary monetary policies and long-term interest rates that are lower than growth rates.
Paradoxically, excessive debt ratios can be positive for equities and real estate.
they won't even really consider raising rates until 2017.... if the fucking world isn't blown up by then.
No, no, no. 15 minutes.
Stay the course BTFD. Software algos don't give a rat's ass about the economy.
S & P up 24 in 6 minutes.
Partytime!!!
1937: Redux.
The Fed has been able to fool most of the people most of the time for the last half decade. How long can they keep the game going?
Indefinitely but not infinitely.
"LIFTOFF"
So far, it's one firecracker under 30 cement blocks.
what a fucking shocker.
the fed will most likely not raise rates in april.
these mother fuckers will never fucking raise rates, why the fuck r there some assholes out there that think its a possible scenario eventually?
they make up every fucking excuse on the planet why they wont do it, eventually they will use the excuse '' we can not raise rates until all 300,000,000 plus ppl in the u.s have some type of job, be it full or part time.
its laughable, yet they will continue to tell us how well the economy is, and cramer can tell us how great everything is.
die fed die die die bankers u fucking piece of worthless scum
She's from Brooklyn.
What does she care?
it's like that video of twitching frog legs hooked up to electrodes... look, they're still moving! but for how long?
The editors of Zero Hedge would like to take this opportunity to congratulate Benjamin Netanyahu on his impressive victory today in Israel.
As many readers know, Zero Hedge has a bit of a soft spot for Israel, and so it is with no small pride that we make this announcement.
Well done, Bibi!
What was impressive with it?
All israeli parties are the same, fuck them all.
You mean Bibi won when they figured out how to turn on the Diebold machines?
Bibi lost until the election results got rigged. Blatantly obvious.
Why does an election in a tiny emerging market country matter?
So just as I've said all along. FED set to raise rates in June of 20 and never. They'll always be a reason not to.
I'm on the edge of my seat, awaiting clarity from the sock puppet!
Blub...Blub...Blub goes usd/jpy. The Nikkei is going to get hammered.
They don't need to raise rates. When QE3 ended, the liquidity drained from markets. Stocks are the only game in town for better yields but depending on corporate buybacks.
We are all Japan now. Slowly grinding down until we're all dead....
Eventually comes QE4, bread prices go up 50%, stocks go up 25% and subprime car loans have 184 months durations.
Money and currencies are essentially worthless but manipulation and propaganda keep a lid on alternative currency valuations and the revolution will never come unless it can be commercialised.
Boring. Might as well start a tack & bait shop.
Maybe my eye sight is failing me in my old age, but those rates on the dot plot seem to be missing a negative sign infront...or was that the joke?
TURN THOSE MACHINES BACK ONNNNNNNNNNNNNNNNNNNN!!!!!
Excuse me for my ignorance as I am still trying to understand how the new markets work. So when the Fed is patient the markets go up and when the Fed is not patient the markets go up. So in all cases it seems that the markets go up. What a wonderful modern invention.
MOAR Goldiloks, this shit never gets old. Bad news is even better than before.
Years from now, economic text books will show QE and ZIRP from the Federal Reserve to be the biggest financial scam in human history.
QE is engineered to provide the Fed's "primary dealer" banks with free money printed out of thin air ("MBS purchases"). The Fed has been their primary dealers to buy up stocks to keep this stock market going higher and higher no matter what.
Don't believe me?.. Look at the correlation between the Fed's balance sheet constantly going up and DOW constantly going up over the past 6 years. Google it. And now since QE ended the DOW has been flat.
ZIRP is strait up theft from savers. QE is basically to protect the assets of the wealthy 1% from natural deflation due to the current economic depression on main street.
Until this artificial stock market finally crashes, sadly nothing will change on main street.
If you print it, they will cum.
The Great Redistribution.
This bitch will go to the moon now! The un-fed runs the entire show and that's all anyone needs to know.
Going down is not in their vocabulary unless it's in regard to sucking wallstreets cock!
extermination of the shorts before the drop ?
... The Fed statement Ha!..... We will say anything to keep the algos in green mode, Duh.
ZIRP & NIRP Fo Evah!
Fed raises rates soon.
If you shake the teacup before you read the leaves, you can change the arrangement.
POMO, Operation Twist, QE 1,2,3,4.
What a complete failure. Stop focusing on rate to change. Your going to get skunked.
http://www.federalreserve.gov/bankinforeg/basel/basel-coordination-commi...
Weimar-on-Potomac!
The move started early - it was leaked.
Yes I noticed it too. Someone got the news early.
" Are you entertained "
Seems they can handle this quite good :D
I knew there would be a vixtermination today.
And somehow people thought the FED was going to throw cold water on the equities market? Joke is on those who were short going into this.
www.traderzoo.mobi
Don't think there are too many shorts left. We will not reach higher highs. To drive markets higher, they need to change up the game again. Just not raising rates ain't gonna cut it.
I've got to hand it to the Fed. Coordinating all of this lunacy to collapse at the same time really takes a tremendous amount of skill. Its an impressive effort.
Janet Yellen, "Actually, inflation and employment are irrelevant. The stock market is our mandate. It must go up. Everyday."
S&P 30 handles straight up in the blink of an eye. Save today's chart to stick in the face of anyone who tells you that stock market valuation isn't entirely dependent on Fed policy.
Oh c'mon... USD was down the whole day... did you really expected any other reaction?... really?... c'mon...
the economy is sooo good we will never ever have interest on savings again
Yellen will be very good for Gold......Patience !!!!!
Aug 17; Oct 18 - both in 2007(?); and now Mar 18, 2015. All days that the Fed jawboned the markets higher. What skill. Wish I was dumber and could be blissfully unaware.
At least they didn't wait until tomorrow morning at 9AM before screwing over the /ES shorts.
At least ZH will not be able to say that hockeystick charts exists only in imagination...
Yellen to Wallstreet, my sagging tits have run out condensed milk. Take it up with Basel steering committee.
What a joke, QE and zirp made the dollar strong, more of the same makes it weak..... Thats a fun game.
Now, how about some big round numbers ( 18,000 5,0000 ) for the "Headlines".... Blow Horns
HAHAHA. "Just because we removed the word patient, doesn't mean we are impatient"
So are we going back to 2100 today? And to think I was always hoping that the economy gets better so he markets go up. How Neanderthal of me.
The Fed is a cornered rat after 28 years of always coming to the rescue of Wall Street anytime the markets get into trouble! The Fed has created a bubble in all financial assets that will be remembered as the Bubble of All Bubbles. The best thing to do is to stay on the sidelines and watch.
So basically the FED just said the U.S. economy sucks.
The FED can never raise interest rates.
Confidence is quickly collapsing.
They'll be re-starting QE before the end of the year!
The fed will never raise interest rates as long as there is a democrat as president, they are very political now. I hope the voters keep electing democrats forever. They are smart, and as a plus they will make me very wealthy. Those radical right wing republicans, who needs them, they don't care. I Hope obama can remain president, even after his 2 terms are up. Maybe he can issue an executive order to stay on as president. How lucky we are to have the smartest president in history to bring us closer to utopia.
FED IS NO LONGER PATIENT, YELLEN MAY GET NERVOUS, ANXIOUS OR EVEN GO BERSERK
Financial analysts risk being replaced by doctors.
Source: www.financialpaparazzi.com
Time for the Kelley Monetary Policy Rule
http://michaelekelley.com/2015/03/27/the-kelley-monetary-policy-rule/
Simultaneous QE and raising Fed Funds Rate.