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Fed's 'Bad Cop' Lacker Sees "Substantial" FOMC Support for June Rate Hike, Economic Weakness "Transitory"
We've heard from uber-dove 'good cop' Kocherlakota (demanding moar QE), Dudley's admission of Dow-data-dependence, and now its Jeff 'bad cop' Lacker's turn to stir things up. Speaking to reporters this morning, lacker explained that recent economic weakness is "transitory" due to weather, and that the FOMC Minutes, despite economists' spin, show substantial support for a June rate hike. Markets are unmoved (for now).
As Bloomberg summarizes:
- *LACKER SAYS IF IT WERE UP TO HIM, FED WOULD SELL ASSETS NOW
- *LACKER SAYS U.S. ECONOMY CONTINUES TO ADVANCE AND DO BETTER
- *LACKER SAYS WEATHER CLEARLY HAD AN IMPACT IN FIRST QUARTER
- *LACKER SAYS SOME OF THE RECENT WEAKNESS IN DATA IS TRANSITORY
- *LACKER: CENTRAL BANKS SHOULDN'T PREVENT ALL MARKET VOLATILITY
- *LACKER: FOMC MINUTES SHOW `SUBSTANTIAL' SUPPORT FOR JUNE RISE
So - it's the weather... and everything is awesome... so hike rates now... and let's have some more volatilty.
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"Full faith and credit"...
tick tock motherfuckers...
It's a strong dollar or death, in every way imaginable.
These bozo's know everything collapse's with the dollar, and now must support a strong dollar policy to its bitter end.
Strong dollar, then we go to war. Everything else is just show.
more dap from powell
http://www.marketwatch.com/story/feds-powell-sees-first-rate-increase-la...
Years from now economic text books will show QE and ZIRP from the Federal Reserve to be the biggest financial scams in human history.
QE was engineered to provide the Fed's "primary dealer" banks with free money printed out of thin air ("MBS purchases"). The Fed then has their primary dealers to buy up stocks to keep this stock market going higher and higher no matter what. QE is designed to protect the assets of the wealthy .1% from natural deflation due to the economic depression on main street.
0% interest rates, (ZIRP) is strait up theft from savers. It's hurting seniors who are going to get wiped out in the coming crash by moving their saving to stocks. The Fed's 0% rate policy also fuels more and more stock buybacks which also artificially inflates the stock market.
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. They are intertwined.
Right now we have one gigantic bubble. The Fed has no intentions to ever raise interest rates because they know there is way to much debt out there now. The stock market is the "mother of all bubbles". We all know bubbles don't last and this is going to end very badly!.
They just got a fresh load of bullshit and need to spread it around....
Impossible.
Unpossible!
That is so cute when they pretend to be responsible administrators.
Lacker? or Lacky?
Repeat after me..... there will be no rate hike. There is too much debt, too many derivatives, and too many unfunded liabilities to support a rate hike.
They don't think like that.
They know they have to raise rates now so they can lower them again later.
Otherwise, how would they justify their existence?
To you and me, this is a farce...but to them it is their livelihood, their reason for being.
dont discount their need to save face.
i think they make a token, small increase (to say they raised rates)....but probably while offering up some other (disguised) easing mechanism somewhere as a counterbalance.
They are not going to exit QE without disrupting the markets, period. They know that.
Technically, QE ended. That does now stop free money from flowing to a chosen few (ZIRP)...
tick tock motherfucker...
With the stock markets at all-time highs, I'm sure they figure that the markets can afford a little disruption.
There is another option here to consider... they keep jaw boning that rates could rise "next meeting" forever. This sky is falling meme is wearing really thin and they are losing all credibility. They know they can't raise rates, but they have boxed themselves in. I think they are desperately looking for a scapegoat. Something "unexpected" but actually engineered so they can use it as an excuse... "We really were going to raise rates in June, but X caused by bad actor Y blew everything up. so don't blame us." What X & Y are, I don't know, but there is plenty of options already on the world table. Plus, make it a Lehman like event, and you have a ready made Pump & Dump scheme to fleece the sheeple all over again. Rinse & Repeat.
TELL THAT TO FED CHEERLEADERS AT CNBC STEVE LIESMAN AND RON INSANA
Don't yell fire in the theater just yet
The Federal Reserve knows it won't raise rates.
It's why it keeps pushing the date forward.
No such thing as normalization in this rigged market. Where banksters run the show.
Eventually they'll say the economy is weak and they'll have to do a larger QE4.
Unfortunately they cannot say "the economy is weak" with the markets at all time highs. They will jawbone and raise rates by very small amounts and try to get a controlled sell off in the dollar and markets. At that point, more rate hikes will actually strenghten the dollar again. The Fed has already basically said "fuck the unemployed/underemployed" and passed that back to their political puppets in D.C.
The rubber will meet the road when the SNAP cards stop working, not before. Could be a while.
As Peter Schiff pointed out QE4 will the the LETHAL dose.
What makes you think there needs to be anymore QE when money is free already (ZIRP)? Tallking about raiseing rates is very different from actually doing it.
good to be reminded that the FED is a pluralistic institution
...composed of a majority of people from a single tribe, yes.
Federal Open Market Comittee?
The market does not seem to be open?
FREE BEER!
(tomorrow)
One option on the table right now is what's called a "mini-hike", not the full quarter point rise but then smaller increases spaced every few months so the Market can absorb the mini increases istead of being jolted.
Would that be like poking very small holes in a dam - say one every month - until the water level slowly falls?
I don't want to be living down stream from that 'catastrophy waiting to happen'.
Gold is rallying hard in Euros, having now retraced 50% of the drop from a few years ago. The US dollar equivalent price would be over $1500/oz
http://www.goldsqueeze.com/analysis
"recent economic weakness is "transitory" due to weather"
LMBO!!! I sure do hope it's transitory. Hope makes me want to just spend, spend and spend some more.
Rates rises are now becoming irrelevant. World is slowly not caring since it has accelerated avoiding USD for real trade.
Financial system no longer matters, unless Fed hikes rates rapidly and drastically to 3-4% within this year, otherwise federal reserve rates will be as important as the interest rates of central bank of north korea quite soon
For the system to survive in its totally, it has to wipe out half of it, otherwise nobody cares about the system.
Rates are now becoming irrelevant?
The FED hasn't raised rates in nine years (June 2006).
Hence world is moving away from the dollar for real trade, hence the longer rates stay at zero the more irrelevant and USD based financial system becomes
World does not like to use USD for real trade (not to be confused with USD used to recycle stocks, bonds and derivatives) because Fed has banned usury.
Usury is needed for a financial system to survive. The system is now becoming irrelevant because usury is banned
Without usury, the world is slowly moving to measure output not in USD but in something else.
Many rates are negative in the E.Z., are you suggesting that the Euro is dead? Enlighten us.
Euro is dead.
Anybody who understands the concept of fiscal tansfers, knows pretty well that euro is dead.
@ekm1,
because Fed has banned usury
What?
zirp = usury ban
If there is a ban on usury then everyone should be allowed to print money asshat.
WTF do you ALWAYS have to revert to school yard name calling?
You are one angry dude.
If that were the case, a person could borrow for a flat fee instead of interest.
And who will lend?
There is a huge misunderstanding of banking system.
Banks do not lend any money. They simply INTERMEDIATE between a lender and borrower
Well ekm1 has that right, banks have not been banks for a long long time. They are nothing but useless middlemen stealing as much as they can while they can.
Lacker lacks realism
whatever the fed does will be calculated to manipulate the last election, just as the last crisis unfolded at the end of the bush presidency.
Rate hike in June ...
... followed by a terrified FOMC QE4 announcement in July.
It's going to be swell!
Is this is the market's "bad cop" reaction, can't wait to see what happens when TJ Hooker arrives (Priceline new highs?)
I have a suggestion for individual investors holding bonds purchased before 2008: Sell.
A quick calculation comparing current price to yield to maturity will strengthen the case to sell now in the face of rate uncertainties beginning in June.
I bought a 40 year bond at issue price (par) in 1989 with a 8.5 percent coupon. I recently sold it at 1.6 times the purchase price after having received 8.5 percent interest for 25 years. This is a gluttonous return by any measure. It illustrates the distortions caused by ultra low interest rates.
The same recommendation can be made to the Fed while the yield on the 10 year Treasury note is less than 2 percent.