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Fed Mouthpiece Hilsenrath Confirms Inflation Concerns May Delay "Liftoff"
Janet Yellen and the FOMC have spoken (in dovish tones) and now so has WSJ's own Fed whisperer Jon Hilsenrath, whose pre-packaged missive (penned under the now default 20 minute pre-release embargo) rehashes essentially what we discussed earlier today.
In short, the jobs market is telling the Fed one thing ("continued imporovement", although Yellen is apparently looking for a bit more), while inflation (held down by lackluster Chinese demand which has in turn exacerbated a global deflationary supply glut) is saying something different, setting up a "cliffhanger" split decision in September and a tentative 25 bps trial balloon hike at the December meeting because after all, at some point Yellen will have to test the waters to discover if an "exit" is even possible without sending Wall Street into an all out panic.
Here's Hilsenrath's 593-word take via WSJ on the Fed's 539-word statement:
The Federal Reserve on Wednesday kept interest rates near zero but cited progress in the U.S. job market, a sign it remains on course to raise interest rates in September or later this year.
At the same time, however, it flagged a nagging concern about low inflation, which is creating caution among officials and could convince them to delay the day of the first increase.
The Fed concluded its two-day policy meeting with a decision to leave its benchmark federal funds interest rate near zero, setting officials up for a potentially difficult call at the meeting to be held September 16-17.
Fed Chairwoman Janet Yellen has said officials expect to raise rates this year. The central bank has three scheduled policy meetings left to act, September being the next one. Wednesday’s policy statement didn’t send an overt signal about timing, giving the Fed an option for action by September but not a clear commitment to it.
Central to the Fed’s thinking is how it perceives its progress in achieving its “dual mandate” of maximum employment and inflation near 2%.
The Fed has said it will raise rates when it has seen improvement in the job market and becomes “reasonably confident” inflation is on course to return to 2%.
The jobless rate has declined from 10% in 2009 to 5.3% in July, but the Fed’s preferred measures of inflation have remained below 2% for more than three straight years. While progress on the jobs front makes officials inclined to act, while the persistent failure to reach the inflation goal makes them hesitate.
Officials in their policy statement cited “solid job gains” and declining unemployment. The characterization of hiring gains was an upgrade from the Fed’s June policy statement, which noted job gains had picked up. The Fed also slightly tweaked its assessment of slack in the job market, saying underutilization of labor market resources had diminished, striking an earlier qualification that slack had diminished “somewhat.”
The new statement included another small hint that officials see themselves getting closer to the full employment goal. For months they have said they wanted to see “additional improvement in the labor market” before being convinced it is time to rais rates. In Wednesday’s statement they said they wanted to see “some” additional inmprovement, suggesting they see themselves nearing their threhsold on the jobs front for action.
As before, the Fed said the economy has been expanding moderately, and cited gains consumer spending and housing investment.
At the same time, however, they said inflation continued to run below the Fed’s 2% objective and said they were continuing to monitor inflation developments closely, a sign of some trepidation about its low level.
The benchmark federal funds rate has been near zero since December 2008, or 2,417 straight days.
The low rate is meant to spur economic activity by encouraging households and businesses to borrow, spend and invest. A worry for the Fed is that it might also spur another bubble like the one in housing that crippled the economy during the 2007-2009 recession.
International economic developments also weigh on officials as they plot a course for the remainder of the year. Slowing growth in China and other emerging markets is putting downward pressure on the price of commodities and manufactured goods imported into the U.S.
Fed officials have described these developments as transitory. In their June policy statement, they noted that energy prices had stabilized, a sign they believed this source of downward inflation pressure had diminished. In Wednesday’s statement they struck the reference stable energy prices, nodding to a renewed drop in oil prices that materialized in recent weeks.
The Fed voted 10-0 on the action, the fifth straight meeting with a unanimous outcome.
So as we tipped earlier, "nothing today, almost certainly nothing in September, and a small rate hike in December just to show it's possible. The question then is will this send the dollar surging even more, and lead to an even more acute crash in corporate profitability, one which not even buybacks and non-GAAP addbacks can save."
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Rate increases will never come.
Agreed...and the Fed will never come clean.
I been telling everybody just that. So hows' about a cut of Hilsenrat's salary?
The Fed isn't protecting us, it isn't rtying to get the economy going, it's protecting the Government. Same as it always does. Yellin is giving cover to the profligate spenders so they can spend more and not face the inevitable consequences of the debt as already buries us.
No bureaucrat ever wants to face the music, that's for th enext bureaucrat to deal with. Eventually the nature of the bureaucrat will bury us all.
Regarding jurbs, the only thing that could be funnier than reading about 5% unemployment, is if Baghdad Bob came on teevee to convince everyone.
Exactly. IBGYBG; I'll be gone you'll be gone among the Elysium class and .gov that are responsible.
Bullshit squared...it's just too easy (for anybody that cares) to show how off base Janet and the Fed truly are...
http://econimica.blogspot.com/2015/06/the-fed-counts-on-you-being-stupid.html
it flagged a nagging concern about low inflation
Lying bastards.... Real inflation near 9% is hardly low.
"I can't eat an iPad," http://www.reuters.com/article/2011/03/11/us-usa-fed-dudley-ipad-idUSTRE...
It flagged a nag, and a nagging concern, both of which hated the idea that people were only losing a lot by saving their money when the Fed wants them to lose a fuck-ton.
Higher inflation means they can pretend to offer slightly more than nothing to savers while still having those poor schmucks lose the same amount as before, tranferring it all to the already stoopidly rich...
Fuck you Yelllen, you fucking nag.
/My time. It is coming.
He who hesitates, masterbates. Keep stack'n,.
Just because someone is a 'saver' doesn't mean they have their "savings" in non-interest-bearing FRNs lent to the banks. I don't understand why low interest rates is always equated as being bad for 'savers'.
I just wish this old hag would retire/expire so someone even more irresponsible would take her place, and I can go on wishing they are hung drawn and quartered in front of myself, friends and family...
Oh yeah, and go silver.
Chinese fear porn worked!
wow i got your autograph 30 years ago. Want to buy it back?
Me so horny for your gold at $900.
And you will sell it to me yankee bastards.
Janet looks hot. How much is her haircut?
The cut it $6...and the bowl is $9.
bahahahahahahahahaha! good one
Damn that still costs more than mine.
Not to expensive as she gets a 2 for 1, same style, for the one up top and the one under her girdle
You have awful taste in women.
WTF? Old Yeller concerned about low inflation? What universe does she live in?
Chapwood Index shows real inflation in US. In 2014, it was 9.7% - 1212% of official US inflation (0.8%)
http://www.chapwoodindex.com/
Really amazing how health care (for others) is going through the roof, rent is going through the roof, yet we have low inflation. BS.
and if you have to buy food.......
The Fed's always looked at commodity prices as essentially the "source code" of inflation and inflationary expectations, right, wrong, indifferent, debatable or whatever.
Now, a great argument can be made that in the New Service Economy where nobody gets served worth beans because nobody doing the serving cares about service and nothing worth anything is manufactured anymore, that commodity prices (as an input) don't matter anymore. Rather, the poor peasantry (illegals, too) not serving people who are not being paid a wage to encourage any service, are being torn asunder by food, rent, healthcare and the like.
But that's a symptom of the New Service (Not) Economy, not the Old Manufacturing System*
Right wrong or indifferent, that's the way the Fed Looks At the World.
Go figure
* Which BTW also means that the last vestige of unionization remains landlocked in the self-perpetuating governmental sector, so they'll continue to get paid very well, thank you very much, and thus, the focus will NOT change!
She's concerned about the wealth effect asset values and bank exposure and little else.
The Chapwood Index is excellent. Although I think that they should consider changing the name so that it doesn't sound like a punch line to a Bill Clinton joke. Don't change it to the Peckerwood Index.
She lives in the world of 'gnomish in appearance, monotonous in tone, and multisyllabic in gibberish'; all prerequisites to be a fed-chair (when you add in egomaniacal academic). the perfect person to placate the dullard masses while lining the gold vaults of her owners. she knows precisely what is happening to the serfs, and knows full well the chapwood impact on the country.
her acts are treasonous, and one can only hope they are treated that way when the shitstorm finally reveals what a fraud she is.
Let the party continue.
Negative rates are next!
Right, In the form of more QE, bail-ins, cash bans. This is the lull before the next storm coming this winter.
Hike rates and watch the economy crater. Don't hike rates and bring on a currency crisis. Those are the long-term options.
nope, there's a third and that is not hike rates and watch the economy crater.
They won't watch the econoy crater. They will revert to their only tool - pringint money and they will destroy the currency, such as it is.
we are currently loosing the currency war. Wait till China devalues 20-30%, then the SHTF for real..... that is the only way for them to revive their market. F the price of a bowl of rice.
we were gonna leave afghanistan in 2009 too.
And Iraq.
Are there any black folks on the FOMC. .
Good point. Maybe they could invite Maxine Waters?
No.
the 1500 layoffs from Chevron will help decrease the unemployment rate. Gee im so good at the maths I should get a job as a fed research assistant!
if they do attempt a quarter-point "liftoff" at the next meeting, the following meeting will result in a "plane crash". they will monitor the market reaction like a hawk (no pun intended to a board of doves) and shit themselves if they realize a quarter-point raise could take the market down 5-10% due to margin calls that start rolling in once the first wave of real selling comes in.
personally, i think they are dead-afraid to do that first raise because their biggest fear is that if the raise a quarter point, the market initially sells-off, then re-ramps, proving the asset-inflation they have installed into markets and that a quarter-point aint shit and that 200-300 basis points would be necessary to stop the stock market from going parabolic.
any way u slice it, they are in a fucking box and thats why they have stalled doing the initial raise for over 5 years. we are still 60% above the previous all-time on the S&P so there is ALOT of froth that can be blown-off this market in short order (should this board ever have the balls to do what needs be done, which i don't see). hope u enjoyed your frankenstein market you created ben/janet. i can't wait to see what happens when he gets-up off the table.
I guess Pot is legal at the FOMC meetings......they must be smoking something.....
They prefer sniffing printing ink and glue...I heard it is a better high without the paranoia!
Yellen Be Droppin Free Cash On Yo Ass.
Surreptitious QE-4!! Helicopters are being fueled. http://www.wyff4.com/news/drivers-report-money-flying-around-on-intersta...
Sorry, Janet you liar, but this doesn't look like too low inflation. PCE has hovered around 2% for 20 years. Sometimes a little higher, sometimes a little lower and it certainly didn't justify ZIRP 20 years ago so why should it now?
https://research.stlouisfed.org/fred2/series/PCETRIM12M159SFRBDAL
what are the chances of Jon and Janet being stuck by lightning at the same time? Unfortunately Small...sadly
You mean Deflation concers.
@letthewurlitz - deflation in commodity markets; inflation in things like housing, rents, stock prices, bond prices. this thing is so fucking upside down we have prices all-over-the-place in-terms of where they could/should be trading.
i agree with ur logic tho; no fucking way with oil in the upper 40's (anything sub-50) does she raise. she could send oil into the 20's and that would definitely send some countries into all-out civil wars, governments overthrown.
better reread your last paragraph. Maybe they want those countries in civil war? They seem to want them in Afghan, Iraq, Libya, Syria.....why not the SAid, Iran, Kuwait, Emirates, Venezuela, Nigeria, .....?
They need an excuse for the coming shit storm.
The LARCENY continues unabated!!!!!
The Fed folds. Peter Schiff takes the pot...again.
SHAK is lovin' it!
Personally, I believe $750 trillion and counting worth of derivatives will permanently delay lift off.
If they want inflation, why don't they just make some: QI.
They cannot/will not raise rates until a reset kicks them in the ass.
We are in a deflationary period not inflationary. Demand is down, Supply is increasing. The prices of all major commodities are headed down. The fraud has been exposed.
The world has lived under the biggest scam in history since 1913.
5.3% un-employment has got to be the biggest fucking LIE these assholes would want us to believe!!
This is such a made up bullshit number that its kind of funny.
Do the stooges who put these reports out get in a room and have a good laugh together before they spew the latest "imaginary" number to the plebes of this country?
They must because this propaganda is blatant and total horseshit!!
"Fine for Hunting"
--Curley
<- 0.25% INCREASE
<- 0.25% DECREASE...
I'm betting the decrease comes first
NIRP, bitches!
Again,
In June they said they would likley raise rates in September...
In September they will say that they will raise rates in December...
In December they will say they will raise rates in March....
In March they will say they will raise rates in June....etc, etc., etc....
THEY WILL NEVER RAISE RATES AGAIN!!
The picture of Janet on the frontpage is her face milliseconds after getting a big dildo jammed up her ass.
Now go back the front page and look.
If you don't laugh you have no soul.
Upvote if you laughed.
Low inflation?? Pull the other one Janet you fucking Bernanke clone bitch
Labor participation rate is 63%. Thus 37% of adults ages 16-65 are unemployed far worse than the 25% unemployment of the Great Depression. Super crash imminent.
"Hang on to your hats and glasses cause this here's the wildest ride in the wilderness." Thunder Mountain
I can only hope and pray that Hilsenwrath dies a slow, painful death. Hopefully involving fire.
Obviously he is a guy that enjoys torture, insider mushroom at the Fed.
I guess somebody else buys her groceries because she clearly has not been to the food store to watch prices rise every GD week!
Any policy changes will coincide with the next big US war, and its been like forever since the last one. They wont pull the rug without a major distraction.
This morning the "radio news" said that the FED was seeing various companies raising prices...but it was a positive sign because it showed they had confidence that the consumer was strong enough to absorb costs the companies had been holding back out of fear of losing market share before.
LOLOLOLOLOLOLOLOLOLOLOLOL
Sick, sad thing is you will talk to the average joe who really thinks that they know what they're talking about and if they say it it must be true. Prols.
I couldn't sleep a couple mornings ago and this little rat was on Bloomberg and this is exactly what he said. The Fed is worried about the low inflation and was saying an increase in September was less likely and maybe even not until 2016. Sure, everything is confidential.
http://thenewsdoctors.com/wp-content/uploads/2014/05/ben-and-janet-yelle...
Amazing how much 'ink' is spent on someone who has so little to say and do.
m.
Now I'm convinced more than ever that the Federal Reserve is absolutely frightened of just a .25% rate hike. They really have painted themselves into a corner.
we may as well have the country's leading astrologers running the economy.
The low rate is meant to spur economic activity by encouraging households and businesses to borrow, spend and invest. A worry for the Fed is that it might also spur another bubble like the one in housing that crippled the economy during the 2007-2009 recession."
Regardless of the actual UE rate, what's the current median income for 70% of singles and couples?
What's the median shack price, nationwide?
What bubble are these hacks not seeing?
How about the Wall Street casino?
What would that farce be worth without corporate share buybacks?
If these enterprises were growing, why would they be necessary?
What about capex spending?
Folks, if the loons at the Fed DON'T raise rates in September, the nation needs to demand
We all know what the government propagandist's job is: To pretend that the economy is peachy in order to keep the Titanic afloat as long as they possibly can. Everything that the Fed says and does is designed for exactly that purpose. We all know that they're lying through their teeth but it does sooth all the muppets out there that just don't know any better.
There's no need to prove that there's the greatest farce in history being played out with Yellen and so forth. The best thing that we can all do is to quit wasting our time by complaining about it and to prepare for the enevitable.
Double post-deleted.
lol........... Poor Old Liesman at CNBC !
I imagine if ever they do raise rates , he'll be so jacked up, he'll be jacking off on live TV over it ........ aaaiiiiiiiii, Yellen baby !!
Imagine that they announced tomorrow that all prices will rise by 10% a year, and write it into law...Sure enough, all prices start to rise by 10% a year...
Would you trust those prices at all? Well, that is pretty much what has been done to our most important markets for the past many years...The current values have no basis in reality, no longer balance risk/reward, do not in many cases even reflect market supply/demand, and balance upon, in turn BEING balanced upon, all the other equally mis-valued markets. It's a very wobbly tower, this so-called free market of ours...
Does anyone actually think there is a mathematical formula for what interest rates ought to be in this environment? LOL! Go ahead, make 'em whatever you want. Whatever floats your boat. Get it out of your system so we can all see the failure and drive on. Enough of this interest rate Salome with the melon dance..."Gimme that casaba, ya peabrain!"...just like Greece, a long, strung out agony of will they, won't they? when they know it makes no damned difference anyway.
Do it or shut the fuck UP about it already! But listening to these idiots agonize over the effects of a quarter-point interest rate hike on this "healthy economy in recovery" is getting highly irritating. If it's THAT fucking bad that it can't take a quarter-point rise off of nearly zero, what does that tell you?
The raising rate dance is just a comedy act now. Credibility gone.
Firk I can just see her over my naked body.
Hopefully when she takes power over the USA or North American Union or American Union... she doesn't see this and want to have sex for more than 15 minutes.
"Low inflation"
Meanwhile, outside of Fed Fantasy Land:
http://qz.com/442037/what-the-hell-has-happened-to-the-price-of-ground-b...
http://theeconomiccollapseblog.com/archives/the-price-of-ground-beef-has...
http://www.shadowstats.com/alternate_data/inflation-charts
Fuck you, Janet.
Ground beef, big deal. The beef industry was seriously under-invested in for the early-mid 2000s on account of the BSE crisis (mad cow disease). Now its a sort of "payback time".
Meanwhile the rest of the economy is in CPI deflation. And likely to get worse as the high dollar destroys exports.
Ho hum. Hyperinflation is inevitable.