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Fed Doesn't Rule Out June Liftoff As FOMC Minutes Show Fed Fears Post-Hike Volatility, Dollar Drag
Summing it all up...
FOMC summed up: We have no clue what we are doing. We missed the 1st qtr slowdown, but it's all uphill from here....hopefully
— Stalingrad & Poorski (@Stalingrad_Poor) May 20, 2015
With all eyes focused on the minutes - as markets play "tightening chicken" with The Fed with stocks flat, gold flat, and short-end bonds flat since the April FOMC - any hint that, despite the terrible data, The Fed has to move, will surely be met with horror...
- FED OFFICIALS GAVE NUMBER OF REASONS WHY 1Q WEAKNESS TRANSITORY
- MANY FED OFFICIALS SAW JUNE RATE RISE AS UNLIKELY
- FED OFFICIALS SAW DOLLAR EXERTING DRAG ON GROWTH 'FOR A TIME'
- FED OFFICIALS HIGHLIGHTED RISKS OF VOLATILITY AFTER LIFTOFF
And yet:
- FED OFFICIALS GENERALLY DIDN'T RULE OUT RATE RISE AT JUNE FOMC
So, once again, just enough there for both bulls and bears from doves and hawks as it becomes increasingly clear that The Fed is cornered.
Pre-FOMC Minutes: S&P Futs 2123, 10Y 2.24%, EUR 1.1100, Gold $1210
Since the April 29th FOMC meeting, Trannies are ugly but the rest are holding modest gains...
Gold is unchanged, Silver and Copper higher...
And while the short-end is flatish, the long-end of the bond curve has been hammered...
* * *
Here are the minutes highlights:
June. June. June.
A few anticipated that the information that would accrue by the time of the June meeting would likely indicate sufficient improvement in the economic outlook to lead the Committee to judge that its conditions for beginning policy firming had been met. Many participants, however, thought it unlikely that the data available in June would provide sufficient confirmation that the conditions for raising the target range for the federal funds rate had been satisfied, although they generally did not rule out this possibility. Participants discussed the merits of providing an explicit indication, in postmeeting statements released prior to the commencement of policy firming, that the target range for the federal funds rate would likely be raised in the near term. However, most participants felt that the timing of the first increase in the target range for the fed-eral funds rate would appropriately be determined on a meeting-by-meeting basis and would depend on the evo-lution of economic conditions and the outlook. In keeping with this data-dependent approach, some participants further suggested that the postmeeting statement’s description of the economic situation and outlook, and of progress toward the Committee’s goals, provided the appropriate means by which the Committee could help the public assess the likely timing of the initial increase in the target range for the federal funds rate.
The Fed is clearly terrified of bond market volatility. So much so, it finally admits we were right all along, and invokes the dreaded "high-frequency trader" phrase for the first time in FOMC history
In their discussion of financial market developments and financial stability issues, policymakers highlighted possi-ble risks related to the low level of term premiums. Some participants noted the possibility that, at the time when the Committee decides to begin policy firming, term premiums could rise sharply—in a manner similar to the increase observed in the spring and summer of 2013—which might drive longer-term interest rates higher. In this connection, it was suggested that the tendency for bond prices to exhibit volatility may be greater than it had been in the past, in view of the increased role of high-frequency traders, decreased inventories of bonds held by broker-dealers, and elevated assets of bond funds.
Good luck controlling not only that volatility, but the only mandate the Fed has had since 2009: the S&P 500.
The Minutes word cloud:
Full minutes below:
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Here we go...enjoy the swings
http://www.bloomberg.com/news/articles/2015-05-20/chinese-gold-standard-would-need-a-rate-50-times-bullion-s-price
$64,000 gold must be close because Bloomberg has been anti gold (sound) money and pro fiat paper money for decades.
FOMC member's prayer: Please, Lord, let conditions worsen so we don't have to do this rate increase. Please. I'll do anything you ask, Lord. Just don't make me do that. Amen.
(Assuming any of them pray, which I have my doubts)
lift off.....fuck you and suck my dick.....
"You can't taper a ponzie-scheme." - Max Keiser
Fuck those evil bastards!!
They didn't *completely* rule out a June increase..meaning that 2 voting members appeared to be in favor. Reality though is that we are looking at October at the earliest, and March 2016 as more likely. And when they do raise it will be such a small amount as to not really matter. Usually equities begin to weaken 6 months before the series of increases begins. I think that may not occur this time. The question for me right now is what would cause a 8-10% equity pullback this year, outside of external political events. Seems more likely to me that an unpredictible political event or natural disaster has greater chance of causing a pullback than the Fed does.
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Yes, tents and camp stoves will be flying off the shelves in June.
Hope you already have a sleeping bag.
And the farce continues.
At times, my penis is transitory!
If I spewed this much BS at work, I would be fired!
This fucking cracks me up. Tyler's headline says the fed doesn't rule out a June rate hike. CNBS and Bloomturd just pushed headlines to my phone that read: Fed all but rules out a June rate hike.
Fucking hilarious:
http://www.cnbc.com/id/102695383
The Tylers are smarter than the MSM.
I want my sammich, Doc. I can almost taste it now!
(I'm gonna lose so bad on this bet it's not even funny.)
Read the same. Look for inflation to move first.
inflation will go up once they start raising rates and then it just catapults higher from there
September
Never
CNBS was more accurate imo.
What was said:
When all is said and done, things will be enacted.
When things are enacted, situations will arise.
Situations will create opportunities for reaction.
By reacting to actions, we will achieve a balance.
This balance will ensure equilibrium.
If equilibrium becomes unbalanced, we will remove things from Balance Sheets by printing moar money.
"FED OFFICIALS GENERALLY DIDN'T RULE OUT RATE RISE AT JUNE FOMC"
They can't raise shit without the house of cards falling apart.
I still see September as when we get the correction in stocks and more.
June has Greek default on the scene. They could use that as either cover to raise anyway when bond market goes bezerk or they use it as excuse not to raise in June when bond market goes bezerk.
But yes, September hike is baked in stone now. Makes sense for many more reasons than they're willing to tell us.
Inflation seems to be the holdup. They want to see positive movement toward the 2% goal. They can live with the underutilized employment/current rate. So all the member speeches are just market manipulation as the committee is holding firm.
Considering the chicken sandwich I got from Jack in the Box yesterday was 30% smaller yet cost 30% more than the one I bought less than 5 years ago I think inflation is well fucking beyond 2% a year. There are no words to describe my hatred for these motherfuckers...
And they are so scared to raise rates a miniscule amount from extremely little after many years of a minute rate of interest
Steve Liesman is so full of shit, I'm surprised he doesn't melt under those studio lights. The q-1 gdp was transitory, yet q-2 gdp estimates gets downgraded weekly, and the q-1 2nd print is going to be negative.
Fucking shill~
Don't let it upset you. Take the free money we make from their rigged casino and enjoy life, laughing all the way to the depository.
The Fed can raise rates and do QE at the same time.
They do whatever the fuck they want, apparently!
+1 Brother!
I've been thinking this for a while. Raise rates to prick the Mega Bubble while moetizing through back channels to keep the dollar where they want it. They're gonna try to have their cake and eat it to. They might just pull it off to some degree. It's all just fucking digits in a computer.
Got to be the best post yet.
Rising wedges all over the indices, H&S longer term RUT plus rising wedge in the last month...trannys not playing nice... topping patterns over the last three days on all the indices...almost too easy to call a downward move which makes me wonder just how hard they are going to kick this pig in the nuts to move it higher. On the other hand, a lot of retail shorts probably got burned over the last 4 days so the big boys could be short here...gonna be an interesting rest of the week
Gold isn't really "flat" it was flattened with huge futures sell orders yesterday and fatso is sitting on it today.
All that writeup just for the Fed Jews to tell us they might or might not raise rates? What a joke, the goyim deserve to be robbed blind as they have been.
Raise them a half point and watch the fireworks.
Go ahead. Please.
A little melodrama kills the boredom.
Yellen speaks on Friday. She will crap in the punchbowl.
Why on earth would the un-fed ever raise rates? Everything is going so well, they saved the planet!
Zero % to the banksters forever... the MOAR the merrier!
Sick twisted freaks!
"increasingly clear that the Fed is cornered"
the Fed has been conrnered for some time now. the moment they began to target ES and 'the wealth effect' they lost any semblance of self-direction they might have had.
if it's a corner of their own making, is it really a "corner" in the typical sense?
more like a self fullfiling prophecy
WHO is doing the prophesizing and WHEN has it ever mattered to argue what they prophesize?
it is THEIR script and we are all bystanders but to think they will deviate from their own script once published is ludicrous.
they are NOT cornered
correct. they will not deviate from their own script... it's a trajectory with only 1 end, 1 means: QE, MOAR QE, and MOARER QE. until inflation spikes.
Los Angeles just approved a Min wage hike that will push it to $15 by 2020. the boarder this movement, the more likely inflation will spike & the Fed will find itself in another corner of its own making. i'm betting stagflation arrives before the unrecovery reaches full speed, downhill.
Trying to turn the volume down without anyone noticing heh?
Until the next FOMC where the language will be that they are sooooo ready to raise rates that well, its not even funny! Liesman will be like " the fed is on the runway ready for take off...blah blah..".
But of course there will never be a rate hike.....,
Then the next minutes will come out that will be again cauntioary in language and then we repeat the same BS again...
This will go on and on and on and on......
Like a broken record..., almost 9 years of rates going up BS now...
..Another 9 years...?
Unleash the algos!
They are already tightening right? The 10 and 30 year have been selling off and rising. I bet they start the raise there, then when they finally have to announce they say: LOLERSKATES... IT'S ALMOST ALL OVER WITH ANYWAY. Haha.
The fed has just admitted a lack of control of the markets, /game
The fed. isn't going to touch rates with China and the ECB easing right now. That would be financial suicide. Look at where the $usd is right now and the drag it's putting on exports. A rate increase would slow things down even more, and the traditionally slower summer months would just compound the issue.
The Fed.isn't going to even think about touching rates until the end of summer.
but they sure can TALK about it..
algo tug-of-war in here. when the U.S. 10-year goes south of 2.25%, SPY fly; when U.S. 10-year goes north of 2.25, SPY go red. rates will dump, stock will fly. why? cuz why not? more of the same shit. stock market junkies keep getting their morphine. throw in the fact that there hasn't been a real IPO since the burger stand & there is M&A all over the place today, this week, and this year + corporate buybacks and this market is gonna just explode to the upside. i seriously think we are hitting a point in federal reserve history where the stock market is gonna have to go up 3% a day before they realize the frankenstein they've created. at that point, they'll have no choice but to hike rates hard & fast. at that point we'll witness the mother of all crashes.
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How does this affect metals prices in the short term? Or does it affect them at all?
What a crock of crap, they'll never raise rates. Headline from 2009 http://www.cnbc.com/id/29258948
deja vu all over. Dump the Feds.
It's ECONOMIC price stability you ass hats, not STOCK MARKET price stability that you're supposed to be concerned with.
October 29th
They will surely not hike rates first. But Greece will, which is already happening. Than stocks tank and hell brakes loose ... banksters will release usd down which will sink likea a brick - than FED will hike rates . To save usd. It's known for decades that FED just follows bond market . Which hardly exists now. That's what they are afraid now ... anybody can break & shutdown bond market now. Draghi is just pumping and pumping cause he has no idea how much will be neccessary
Fed is waiting for another couple months until Jade Helm and US military is well dug in before coming out and saying they can't raise rates, and discard the words 'data dependent'.
Dovie'andi se tovya sagain (It's time to toss the dice)
Got Karatbars?
All of this posturing and bs about raising rates is just that, posturing and buffalo shit.
Go ahead... Raise em, I double dog dare ya.
When you have to raise rates, raise them! Don't talk.
This is simple:
1: No more ZERO RATE, ever.
2: Tax each trade up or down and conformation of payment required.
3: Only accept BITCOIN, thus trades will have to be done in aggregated lumps and no BITCOIN will be accepted that was created after the bond issue.
Think about it.
How the hell does ZH write this thing in three minutes from the release of the minutes?!