"Stingy" Fed Whisperer Hisenrath Confirms Hawkish Fed Ready To Hike Rates

Tyler Durden's picture

Working at the usual blistering pace, WSJ's Fed mouthpiece Jon Hilsenrath cranked out 648 words in the space of just four minutes on the heels of today's FOMC announcement. "The Federal Reserve signaled it was moving toward interest rate increases in the months ahead now that signs of a dip in economic activity early in the year are waning," Hilsy notes, confirming that stocks are indeed still set for a rendezvous with 1937. 

Via WSJ:

The Federal Reserve signaled it was moving toward interest rate increases in the months ahead now that signs of a dip in economic activity early in the year are waning, but the path of rate increases could be less steep than officials anticipated before.


For now, the Fed said, a benchmark interest rate near zero “remains appropriate.”


But in forecasts the Fed made public about its interest-rate outlook, 15 of 17 officials said they expected to start raising short-term interest rates before the end of 2015. The projections suggest officials are gravitating toward one or two quarter percentage point interest rate increases by December. That would move the Fed’s benchmark interest rate up from near zero, where it has been since December 2008.


The last time the Fed made such projections, its consensus appeared to be building around two rate increases this year. Fed officials also nudged down their rate projections for 2016 and 2017 by a quarter percentage point. The shifts suggested officials have become less certain about the longer-run vigor of the U.S. economy and its capacity to withstand much higher rates. Expansion of output is on track again in 2015 to undershoot the Fed’s expectations.


The meeting has gotten a great deal of attention because Fed officials had declared in March that it would be a live meeting when an interest rate increase was possible if the economy had performed up to expectations. Early in the year many Fed officials thought a rate increase in June was a likely scenario. Then the winter slowdown derailed that plan and many investors are now looking toward a first rate increase in September.


In a policy statement accompanying its newest economic and interest rate projections, the Fed pointed with some relief toward an improving economic backdrop after output contracted in the first quarter. Economic activity had been “expanding moderately,” the Fed said, after a winter stall, and job gains had “picked up.” The Fed pointed to a “moderate” pickup in consumer spending and some improvement in housing.


While inflation continued to run below its 2% objective, the Fed noted energy prices had stabilized after driving inflation lower.


The Fed has been saying since March it would begin raising rates when it sees further improvement in the labor market and becomes more confident inflation will move toward its 2% objective.


The central bank’s projections suggest a September move remains possible, but disagreement is brewing among officials about how soon and how aggressively to act later in the year.


For the fourth straight meeting, Fed Chairwoman Janet Yellen won uniform agreement on the rate decision with no dissents.


The interest rate projections showed that two officials don’t want to move rates at all this year. Five officials, on the other hand, want to move rates up by a quarter percentage point and another five want to move it up by half percentage point. In March, only one official saw a quarter percentage point increase and seven saw a half percentage point rise. The shifts show the center of gravity on the number of rate increases this year is moving down.


The median estimate for rates in 2016 has shifted down to 1.625% from 1.875% in March. The median estimate for 2017 has shifted down to 2.875% from 3.125% in March.


In economic projections accompanying the Fed’s statement, the central bank revised down its estimate of growth for 2015. In March the Fed saw economic output expanding by 2.3% to 2.7% this year. In the latest estimate it revised output growth to 1.8% to 2.0%. The Fed has consistently for several years found itself revising down growth estimates after early-year stumbles. However the central bank stuck to projections for the coming years.


The Fed nudged up its unemployment forecast for 2015, but kept its inflation forecast largely in line with previous estimates.

*  *  *

So thank you vanishing workers and double-adjusted GDP prints, we're now all set for a rate hike-induced recessionary talespin to be followed by QE4 which, as BofA recently noted, is "the biggest risk" of all for global equities.

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Arnold's picture

Horse shit Hilsenrath, shit or get off the pot.



drendebe10's picture

Yah, the sh*t4 brainz will raise rates 1 basis point.... whoopdeeedoo...

Pool Shark's picture











XitSam's picture

I submit that when the crash happens, multiple Fed officials will say, "No one could have anticipated this," and "It might be true that the Fed should have raised rates earlier."

philipat's picture

Which begs the question if The Fed is so useless and/or incompetent, would we not be better off without it and the debt money it prints?

ZoroAustrian's picture

And the interminable groundhog day song and dance goes on ...

Stoploss's picture

The median estimate for rates in 2016 has shifted down to 1.625% from 1.875% in March. The median estimate for 2017 has shifted down to 2.875% from 3.125% in March.


Now, Hilsentard, using this kind of "we have no clue"  math modeling, it translates into one word.


NO... 2016

NO... 2017

NO... NO... NO...

As in there will be NO rate hike.  Ever...


Bay of Pigs's picture

The Bernank said there would be no normalization of rates so why do people expect the FED to do anything at this point?

The last rate hike was 7 years ago.


Pool Shark's picture



Cleavon Little Plays Janet Yellen in this scene:



Oldwood's picture

Hope and change is the new normal. Of course nothing will change for the positive but we are to remain hopeful. This is our current and foreseeable normalcy.

We used to live with times of peace interrupted by war, a cycle so to speak. We used to have bubbles followed by corrections, again cycles. Now we have perpetual war and perpetual corrections that maintain their beloved equilibrium. At some point we will understand that this "dead in the water" equilibrium is actually DEATH. All living things have cycles and even non living things such as planets are in constant cyclical motion. Like the drugs we feed our kids, we think we can improve life by leveling these ups and downs, highs and lows, and while the extremes makes sense to avoid, living with no ups and downs is not much more than a zombie death. Ultimately this is not sustainable and while I have no idea how it will happen, the longer it is maintained, the more vicious the ultimate "correction" will be. And money will be the least of it. We will see massive death because it will be the ONLY thing that brings pleasure. We are already at the point where a significant number of our population are willing to accept loss if they perceive others are injured even more. The consummate self destruction of a species.

MATA HAIRY's picture

baloney...the macro data is looking bad, like we might be headed for a recession, and so the fed is trying to convince everyone the economy is doing great, thus hoping to avoid a recession

NoDebt's picture

They're trying to sneak them in before the recession is declared (which would be long after it actually started).  All that assumes any of us will live long enough to see the next officially declared recession, which is unlikely.

Bastiat's picture

Recession?  We're in a depression -- only difference is digital vs physical bread lines, and liquidity-juiced asset prices: bonds, stocks and real estate.

Oldwood's picture

A recession is economic, a depression is psychological, therefore our solution requires better drugs. The next government stimulus program will be real stimulants...pills, injections, smoke....anyway you want it. They are all about our happiness....but no trans fats or large sugary drinks! There must be limits!

MonetaryApostate's picture

I stopped reading at "Via WSJ"....

zeroaccountability's picture
zeroaccountability (not verified) MonetaryApostate Jun 17, 2015 2:28 PM

Me, too.  I'd rather read The Vagina Monologues than Hilsenrath's vitriol.

Hubbs's picture

Lets see, how many insiders are there at the FED? There must be therefore hundreds of combinations and permutations of forthcoming rate hike leaks, each with the purpose of bullshitting the public and markets for as long as possible,  that can be dished out to the public.

This shit never ends.

jim249's picture

The same crap that has been going on in Greece and the EU for years now.

NoDebt's picture

Challenge accepted.

- Janet Yellen

NoDebt's picture

"I want him DEAD! I want his family DEAD! I want his house burned to the GROUND! I wanna go there in the middle of the night and I wanna PISS ON HIS ASHES!"

Anunnaki's picture

Grandma Yellen will never raise rates. Too much easy money for stock buybacks.

Carl LaFong's picture

Complete and utter BULLSHIT!

Dr. Engali's picture

And now we take you back to our live action cameras at Greece...... Take it away Alexis.

aliki's picture

another clown who obviously missed the part where the fed slashed its GDP projections. never seen the groundwork layed for a future excuse more clearly. JMO tho.

buzzsaw99's picture

Mother: This is your trough. Show me how the piggies eat. Be a good boy. Show mommy how the piggies eat.
Randy: [plunges face into mashed potatoes, oinks, eats, and laughs]
Mother: [laughs] Mommy's little piggie!

Mike Honcho's picture

That guy, always with the jokes!

sschu's picture

Raising rates would be the worst thing they could do right now for the market and everyone knows it.  They have little intention of doing so unless there is political pressure.  

It is hard to imagine either party being in favor of raising rates right now, too much downside as the presidential election approaches.

But we near the end of a shemitah year, so what they do is somewhat inconsequential.



Oldwood's picture

The trick is to tell people what they need to hear while providing for those who depend upon you, and she has sooo many dependents. Doing God's work.

Duc888's picture


As soon as rates hit 3% I'm doin' the hucklebuck.


.....followed by the obligatory "Bang Zoom....to the Moon".



matinee55's picture

Always jawbonning, Never doing.  PPT are exhausted

BoPeople's picture
BoPeople (not verified) Jun 17, 2015 1:47 PM

All sorts of "psyops". The question is one of intent and origination.

If I have any suggestion to people, it is to get "grounded" and to search for the truth. See the corruption for what it is and then question ...

In.Sip.ient's picture

First...Yes they WILL hike.

Second... NOT becasue they want too.

You can bet this rate hike, is late in coming and they'll

foot drag if they can.  But I suspect they can't anymore.


The silk road, AIIB and SCO are becoming unintended

competition that can't be ignored.



I woke up's picture

talk talk talk, empty words

zeroaccountability's picture
zeroaccountability (not verified) I woke up Jun 17, 2015 2:31 PM

All Hat, No Catalyst.tm

Duude's picture

I find the words, "data-dependent" to be so open-ended as to be meaningless. Its simply a decision looking for data to point at after the fact.

Mini-Me's picture

Hike rates and you can kiss goodbye that farcical "wealth effect," followed by an official recession (we never left the one that started 15 years ago).

Don't hike rates and wait for the inevitable currency crisis.

In other words, we can enjoy stagflation, followed by a painful depression...or endure a hyperinflationary depression.  Either the economy resets or the dollar becomes toilet paper.  Pick one.

Marco's picture

IMO you can't reset an economy without resetting the unencumbered asset ownership distribution. Hyperinflation does this as long as a large part of the population are home "owners", they can pay off their mortgages with toilet paper and come out with some unencumbered assets. A depression hands all the collateral to the top creditors, this is not a reset ... it just pulls the curtains away from the reality that a small number of people own almost everything.

After a deflationary depression we would still either need a revolution, or some extra-ordinary circumstance (a new world war or a new black death) which would suddenly make labour valuable enough to reset the asset distribution in the economy.

Oldwood's picture

The problem with your thesis is that inflation or even hyperinflation costs rise faster than incomes. We never catch up. The only advantage is if you have a fixed rate mortgage and have assets yielding higher interest rate returns than those costs. Most of us will end up being eaten by higher fuel, food, transportation and general overhead costs like insurance before we ever get to see a benefit to our mortgage.

The best be it no debt. At least you have flexibility.

Marco's picture

Hyperinflation and normal inflation are not comparable.

If you have a fixed rate mortgage in a hyperinflation scenario you have no mortgage, there is no cost to pay it off. It's an infintisimal part of your wages, a roll of toilet paper would cost more than paying off your mortgage. Early payment penalties? Well that's another roll. If you have thousands of percent of inflation within an ARM adjustment period then you will be able to pay it off just as easily.