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FOMC Minutes Expose World Weary, Un-Patient, Dow-Data-Dependent Fed
Following the surprise dovish FOMC dot-downgrade to counter hawkish 'patience removal', and this morning's admission by Dudley that The Fed is Dow-Data-Dependent; expectations for the FOMC Minutes offering any insights were low...
- *FED OFFICIALS FAVORING LIFTOFF LATER IN 2015 CITED DOLLAR, OIL, CHINA, GREECE
- *FED OFFICIALS WERE SPLIT ON JUNE RATE RISE, FOMC MINUTES SHOW
- *MOST OFFICIALS SAW RISKS TO OUTLOOK, JOB MKT NEARLY BALANCED
So "worried" about the world, "downside" risk to growth but reasons to be cheerful, unpatient and data-dependent liftoff... something for everyone.
Pre-FOMC Minutes: S&P 2079, 10Y 1.89%, EURUSD 1.0815, Gold $1206
- *A FEW FED OFFICIALS SAID USD MAY RISE MORE ON POLICIES OVERSEAS
- *FED OFFICIALS REPEATED THAT CHINA, GREECE WERE POTENTIAL RISKS
- *A FEW FED OFFICIALS SAID USD MAY RISE MORE ON POLICIES OVERSEAS
- *MINUTES SHOW ALMOST ALL FED OFFICIALS NOTED RISKS FROM OVERSEAS
- *SEVERAL FED OFFICIALS EXPECTED A FAIRLY GRADUAL TIGHTENING PACE
- *SEVERAL FED OFFICIALS SAW DOLLAR AS A DRAG ON EXPORTS, GROWTH
- *SEVERAL FED OFFICIALS JUDGED A JUNE LIFTOFF WOULD BE WARRANTED
- *FED MINUTES SHOW OTHER OFFICIALS FAVORED LIFTOFF LATER IN 2015
* * *
Some of the key sections.
On the great debate of a "liftoff" in June versus a delay to 2016:
Participants expressed a range of views about how they would assess the outlook for inflation and when they might deem it appropriate to begin removing policy accommodation. It was noted that there were no simple criteria for such a judgment, and, in particular, that, in a context of progress toward maximum employment and reasonable confidence that inflation will move back to 2 percent over the medium term, the normalization process could be initiated prior to seeing increases in core price inflation or wage inflation. Further improvement in the labor market, a stabilization of energy prices, and a leveling out of the foreign exchange value of the dollar were all seen as helpful in establishing confidence that inflation would turn up. Several participants judged that the economic data and outlook were likely to warrant beginning normalization at the June meeting. However, others anticipated that the effects of energy price declines and the dollar’s appreciation would continue to weigh on inflation in the near term, suggesting that conditions likely would not be appropriate to begin raising rates until later in the year, and a couple of participants suggested that the economic outlook likely would not call for liftoff until 2016.
On "exports", and the USD strength:
In their discussion of language for the postmeeting statement, the Committee agreed that the data received over the intermeeting period suggested that economic growth had moderated somewhat. One factor behind that moderation was a slowdown in the growth of exports, and members decided that the statement should explicitly note that factor.
On the strength of the dollar:
A number of participants cited the further appreciation of the dollar and recent weakness in spending and production data as reasons for their revision.
On the pace of normalization:
Some participants emphasized that the stance of policy would remain highly accommodative even after the first increase in the target range for the federal funds rate, and several noted that they expected economic developments would call for a fairly gradual pace of normalization or that a data-dependent approach would not necessarily dictate increases in the target range at every meeting.
On "international" developments, and even Greece makes an appearance:
Participants pointed to a number of risks to the international economic outlook, including the slowdown in growth in China, fiscal and financial problems in Greece, and geopolitical tensions.
And the most important topic: why the Fed will never reduce its balance sheet:
Many participants mentioned that selling assets that will mature in a relatively short time could be considered at some stage, if necessary to reduce ON RRP usage. However, a number of participants noted that it could be difficult to communicate the reason for such sales to the public, and, in particular, that the announcement of such sales would risk an outsized market reaction, as the public could view the sales as a signal of a tighter overall stance of monetary policy than they had anticipated or as an indication that the Committee might be more willing than had been thought to sell longer-term assets.
Finally, it seems, the Minutes failed to include the real Fed Dot Plot once again...
Courtesy of @Not_Jim_Cramer
The full minutes (link):
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Well, many of us are still "torn" about the Easter Bunny, Santa Claus, and other mythical creatures...
FOMC = So buy stawks, right?
There will be no rate increase...
Ever...
There can't be a rate increase...
Ever...
FIFY
FED = Chronic Liars
This market rallies any further, it'll be time for an IPO of my toilet paper company .... ecologically correct. To save fiber, it has holes in the middle for your finger. Earnings and sales forecasts? Pfffft!
Credibility. Debating a June rate rise in April. Needs some serious fuckin' adult supervision.
Tickmill trade alert: Dollar rally will be sold into today.
well at least they're able to monkey hammer gold and silver......gotta save that fiat paper ponzi
FOMC = So sell silver, right?
US Dollar up = So buy stawks, right?
US Dollar down = So buy stawks, right?
14:20:32 - 2500 eMini's bought at once in 2 trades - 2000 + 500 contracts $ES_F $SPY
Whoo hoo, another 1500 points + on the Hang Seng tonight
I believe in arm chair quarterbacks
That's the theory....
I can't wait until I hear CNBC: "A declining stock market is good for your cornholio, I mean portfolio."
BUNGHOLE!
Heh... Heh heh he..
I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.globe-report.com
OMG. Did the FED actually mention China???
Janet get healt buln flum MSG
China ? My china smashed to the floor when they mentioned Greece ! Opa !! The Greek connection or is that Greece Lighting ? is the funniest discussion point yet. I hope they invite Mr. Panos to the next FOMC meeting as a guest speaker.
then, to double-down...
then again,
Participants pointed to a number of risks to the international economic outlook, including the slowdown in growth in China, fiscal and financial problems in Greece, and geopolitical tensions.
Wow!! April 9, 2015...what an IMF'n-day as the sun rises now over Greece.
Will they or won't they ?
Even if Greece default tomorrow on the IMF...then Greece has 30 days to make the payment, and in the meantime every other CB cabinet and management will be running around with their hair on fire. Greece gets a better deal by defaulting now and paying later, within the 30 days.
Get our the popcorn.
wtf does "patience" have to do with destructive monetary policy? who signs these people's paychecks and why?!
You must be patient to bring destruction to fruition
Assassins tend to be very patient.....
They can print money, no one has to sign shit. "Money" creation is no longer attached to collateral or anything fucking real for that matter...
see the real problem yet?
what is not "real" about unemployment and inflation?
Still believe in infinite growth in a biosphere with finite resources?
Good luck with that asshat.
There is no utoptia you stupid fuck, there will always be poor and unemployed. Free will and moral hazard are a real bitch.
I don't know, I see infinite growth potential in fiat.
Honestly man, "asshat" and "stupid fuck"? Why not call me a "psy-ops pawn of the elite" or a "dirty NSA lurker"? I thought my question was fair in response to your post.
The *loudest* complaints on QE have come from the very very rich. Are you rich and angry? You clearly aren't unemployed.
You are the sucker that believes in utopian fairy tales. Some people will always be unemployed and some people will always be starving. QE unleashes moral hazard on a massive scale and only insures that there will be exponentially more unemployed and starving poeple in the future. That's where the anger comes from.
Eh well. I'm a sucker now that believes in utopia and fairy tales? First: "on the Internet, nobody knows you're a dog." And second: perhaps you are angry because you have lots of cash and QE has destroyed your ability to continually roll that cash into short duration high-yielding securities? Moral hazard is everywhere...and I don't mind Fed bashing for the right reasons...but too many people have been duped by the self-interested wealthy like you who are spinning a narrative that "QE hurts the poor and middle class". Call your bond broker and cry to him that he can't structure your ladder right.
They will NEVER raise rates.
Nobody really cares because nobody can really do anything about it.
Central command makes and breaks with or without rate rise.
Saying "rate rise or not" is the same as saying that the market is functioning properly.
No it is not. The market is controlled and a rise would only be a superficial reason, but not the tool
With or without rate rise, financial system is insolvent and needs catharsis in order to function.
Federal Reserve has zero control and zero power.
Central Command has the power via NSA controlling electronic feeds to the trading systems.
Rates don't matter because market does not exist.
I predict, weeks, not months, that central command will have no other option but to allow Lehman number 2 as they allowed Lehman number 1, otherwise world accelerates de-dollarization of real trade
Well you have the "there is no spoon" part right but you sir, are an optimist.
As a farmer with physical, I am going to start issuing LoP silver notes. They will contain 0.01 ounces of silver and be fully convertable for anything we grow...
fuck it, I want in on the money creation too.
The 10 year UST will NEVER be above 3% again.
Never is a long time. I'd take a bet it gets to 30% sometime in the next five years.
wtf?! (or we haven't a clue what to do so we won't do a thing - after all everything is awsome as is -)
No raising rates EVER (unless WWIII), NIRP coming to the USSA banking system, and the new world order is gaining steam. Any questions?
Another delay in raising rates. Big surprise.
Nice up move in the USD. bye bye euro.
As Europe continues NIRP, the USD will continue to climb well beyond par.
Waiting for some Heavenly sign is not a firm Policy foundation.
I find this continuing micro-aggression nearly actionable.
Arnold - " Waiting for some Heavenly sign is not a firm Policy foundation. "
I doubt the banksters have any connection to Heaven. The exact opposite is far more likely.
As I've said before just look at "dot" graph 3 years ago and today and eventually 3 years from now and they will all be the same. If I hear one more person who makes money talking/writing about the FED and credibility I'll puke.
Its like pretending the war on drugs or terror or poverty will ever work and are anything more than a MONEY GRAB. Where have all the adults gone?
Government positions or Goldman, or Goldman and government positions,
or writing books about Goldman and government positions, ....etc.
I remember an exercise; who would you save to re establish the world.
The prostitute was always one of the correct answers, doing what they had to do to survive.
The above mentioned cockroaches are doing just that.
nakki - " Where have all the adults gone? "
If there were a significant number of real adults, there wouldn't be so many fooled by false 'authority' and promises of 'security' .
It seems that most people long for a 'Mommy' and 'Daddy' and will fall for whatever surrogate they are offered - from formal religion to government to just about anything else.
Pratings of ever-more-irrelevant fools.
so basically...no fed rate hike this year? maybe non next year?
ears covered, now repeat after me....
"la,la, la, la,la, la, la, la, la,la,la,la,la,la,la,la,la,la,la,la,la,la,........"
ps: look at the fucking Dow....what a fucking joke....
Did I hear BTFD?
"No one" saw it coming: http://hw-mobile.worldstarhiphop.com/u/vid/2015/04/dO6jrsuACl5n_mobile.mp4
WAIT! WHAT?!
The Fed is very credible...to the big banks.
The Fed is going sit back and rig the markets as it sees fit, Federally Insured Prosperity for all club members.
It's all about the stock markets - if you are not participating then f$ck you.
looks like the NY FED just fixed the post-FMOC reaction by knocking the SP500 higher by 10 points in a straight line. maaaaaarkeeeeeets
I only just hope I'm still around to be able see this shitshow finally implode into a slag heap.
I've taken out 5 Credit Cards, bought an exotic sports car to secure a loan against, put my house uder 2x more mortgages and this AM pawned all my Gold and Silver for cash and have cleaned out my kids savings accounts for College and put it all in my E-Trade account.
NEVER a better time to invest!.....I Can't Lose!!!
Like I said, you need to be a lunatic to hold PMs or any commodity.
They told me that when I bough in 2005, made a killing in 2011. Keep telling yourself that.
Forget Interest Rates, the Fed Has Another Big Decision to Make in the Next Year http://www.bloomberg.com/news/articles/2015-04-08/2016-fed-balance-sheet...
Hahaha who would have guessed? Don't be that guy trying to call the top.
Simply a reminder of where Wall Street gets their qualudes.
When after 6 years of "recovery" raising rates even a tiny bit is such a hassle for certain you know the patient is dead.
Rising rates or a declining stockmarket will hinder the geopolitical games also so forget it.
mind numbingly bullish.
Well... It's back to the primate cage at the N.Y Zoo for all the Fed. members for another month of shit slinging.
And the most important topic: why the Fed will never reduce its balance sheet:
Yes they will and this how they will most likely do it.
V=IR
Voltage = FRNs
Current = interest rates
Resistance = banks
+I = V/R
-I = -V/R
(-) interest rates = they are pulling money out of the banking system.
They hit the limit of resistance aka primary dealer banks lending money out of the loop aka main street. There are only 2 ways to pull money out of the new closed loop system. Reinstitute Glass Steagal so the banks have incentive to lend money instead of comingling investment and savings or negative interest rates on banks holding money.
The only way they can raise interest rates is if investment and savings are finally redivested again like they used to be or they have to draw enough money out of the system first before they can raise rates to replace it.
The third way is to bypass the banks outright and start offering direct financing to main street, including individuals and businesses but that won't happen unless the MIC is onboard with it. What would potentially happen is over time the TBTF banks if they don't still lend all wind up becoming investment banks only (sideways market driven Glass Steagal without a law passed). That ain't happening so it is either one of the 2 options above.
If they draw out enough money from the system then can then raise rates and try to shrink their balance sheet by turning all that toxic mbs trash and other turds on their balance sheet into cash injecting it back into system through 'money creation processes'.
If anyone still thinks the FED and TBTF banks are playing on the same team or think the FED runs the government think the fuck again because if they did they only way out of this trap legally without the FED acting unilaterally aka bypassing the government and banks by issuing legal tender money directly to main street is to reinstate Glass Steagal.
Either way the FED is pretty much done, stick a fork in them they are in the final death throes without either happening.
The only tool they have left is psychology hence the 360 degree bullshit spew in all directions to keep things leveled while they are deflating the money supply.
More QE, SPX to 3000 and DOW to 20000. The games will continue and reality.... no more.
A strong dollar is a drag on "growth?" Not according to the latest trade figures.
Puh-Lease!
They have to lift rates - even if it is only 1/20th a basis point... for no reason deeper than the need to say, "SEE?? We don't just protect banks! We raised rates!... Briefly, and by an infintessimal amount."
If they don't raise rates they lose what is left of their credibility...and the existence of the Fed is at risk.
If they raise rates too much they take the blame for the ensuing conflagaration...which, ironically, will happen anyway because of all the QE.
Put the two together and what do you get?
Timid rates raise followed by a quick reversal and/or return to QE.
Yep, didn't see your post before my comment below. They need to save face so raising rates by anything will count. Total joke.
They can raise by 10 basis points, then lower by 5, up by 2, down by 10. That could go on until the asteroid hits.
Fed announced dramatic rate increase of 1 basis point! In-depth analysis at 3.
Don't believe it. They will never be able to raise rates until a new currency is produced.
That assumes they are allowed to be the producer, any change requires real guns to back it up. If you read my comments when push comes to shove we know which horse the MIC is going to back or else either of the options mentioned would have happened already.
Fed members torn over rate hike timing, with some seeing 2016, minutes show (CNBC) 04.08.2015
FED MEMBERS ENGAGE IN FOOD FIGHT TO DETERMINE INTEREST RATE DIRECTION
Source: www.financialpaparazzi.com