This page has been archived and commenting is disabled.
To Hike Or Not To Hike (Fed, Economists, & Market Divided)
No matter what, it's going to be a close-call...
Fed members notably split
And investors’ conviction of rate hikes in 2015 has been drifting...
Market pricing of the timing of lift-off has fluctuated in a wide range this year:
- Market has priced 20-100% hike odds by Sept.
- Odds of 2015 hike fluctuated between 50-100%
Key data releases have led to big shifts in market pricing as Fed emphasised data dependence
- Strong January employment data led markets to fully price hike by September
- Dovish March and June FOMC meetings led to lower odds of a hike this year
Current market pricing suggests 30% odds of a hike in September and 75% chance of lift-off this year
Low market pricing likely lowers chances of a hike in September
- Fed would like to avoid surprising the market
- Hiking against market expectations in September means greater volatility and more tightening of financial conditions than desired
Economisseds remain split...
But then again - they have been clueless...
And as Ransquawk notes, the various banks are also split down the middle on whether The fed should hike or not next week...
NO HIKE: BarCap, BNP, Credit Ag, Credit Suisse, HSBC, GS
HIKE: BoFA, Deutsche Bank, JPM, RBS, Wells Fargo
Here's why Deutsche Bank thinks they should raise rates in September...
* * *
Finally, this is the most important chart for the next few days...
h/t @Not_Jim_Cramer
Simply put - The more you buy stocks, the higher the probability of a turmoil-creating rate-hike next week - that's the Dow-Data-Dependent Fed at work folks!!
»
- 15760 reads
- Printer-friendly version
- Send to friend
- advertisements -
+0.175 just to be safe
and some qe on the side so the bosses dont get mad.
And through everything, nopat is still missing.
They have no choices except war or no war.
RIPS
They could always do the right thing.
(Did I say that?)
Start jacking 'em up, baby. The longer you wait the worse it will be.
You got it!
The Feral Reserve loses all of the vanishing credibility it has left if it doesn't raise rates now.
There is no going to be rate hike. All discussion of upward adjusting interest rate is only for your entertaining pleasure. Duration Mismatch is prevent rate increase in USSA and other Central Bankster economy. When bank is borrow short, lend long, leave interest rate too low too long, it is stuck at NIRP.
... but what is Boris know!?
How so when "they" don't even know what the right thing is!
<-------- NO HIKE
<---------- HIKE
no matter what happens, This FED HIKE, and rumors of fed hiking is go to create MASSIVE opporutnities on the stock market.
One Market analyst I listen to ==> http://www.bit.ly/1fMcakI his calls are rediculously accurate. He basically says aapl is a chart that has lots of profit potential going into the end of year.
I sold my aapl in 2014, but licking my lips, because its sold off so hard this year. I think I should get into a buying mood soon. I do not want to miss out on the rally coming.
The chart here is amazing ==> http://www.bit.ly/1fMcakI
Maybe this will tell you whether they will hike or not...released conveniently AFTER the market close today:
Fund Investors May Pay Fees for Withdrawals Amid TurmoilDavid Michaels
September 11, 2015 — 10:30 AM PDTUpdated on September 11, 2015 — 1:37 PM PDT
Do
Share on FacebookShare on Twitter
Mutual funds may be able to charge their investors who rush to cash out during periods of market stress under a rule being considered by the U.S. Securities and Exchange Commission.
Officials at the regulator think the change could curb the impulse to stampede out of mutual funds when asset prices are at risk of tanking, according to two people familiar with the matter who asked to not be named. The measure, which is part of a broader rule proposal scheduled for a Sept. 22 vote, could help funds cope with shocks such as a central bank’s move to hike interest rates that could prompt widespread investor withdrawals.
The Federal Reserve as well as other regulators have voiced concerns in recent months that mutual funds that have loaded up on less-liquid assets could struggle to sell holdings during a market rout, making it difficult to pay investors who want their money back. Last year, SEC Chair Mary Jo White announced plans to propose new rules to address worries that existing safeguards weren’t designed for funds that are increasingly investing in securities such as junk bonds and bank loans, and using derivatives to boost returns.
“This is trying to impose some countervailing pressure on redemptions during periods of instability,” said Robert Plaze, a partner at Stroock & Stroock & Lavan who was previously a senior regulator of mutual funds at the SEC.
Swing PricingUnder current law, investors buy and sell shares at the fund’s closing price, known as net asset value. That reflects the value of the fund’s holdings and the total number of shares issued.
The SEC’s staff is now recommending that funds be allowed to pass on some of the trading costs they incur to meet redemptions to investors who exit. The concept, which is known as swing pricing, would allow funds to adjust the price that investors receive when they sell shares back to the fund. In effect, those investors would receive a price that is slightly lower than the fund’s closing price.
“It would be a pretty big change for the end investors to accept that the cash-out is not at the price they see,” said Sean Tuffy, the head of regulatory intelligence at Brown Brothers Harriman & Co.
The use of swing pricing would be voluntary under the SEC staff’s current plan, which could trigger questions about whether the agency’s action is aggressive enough to prevent runs on funds and protect investors who stay put.
Industry ThresholdThe concept also could be seen as unfair or too complex to explain to retail investors, while also introducing more volatility into the price of mutual fund shares. Unlike redemption fees, which are imposed on investors who trade frequently, swing pricing could hit a long-term investor who sells on a day when lots of cash leaves the fund. The fees also could hit investors who buy shares on days when a lot of cash flows into a fund, which also requires trading, Tuffy said.
The approach could change as commissioners debate the details over the next couple of weeks, according to the people.
The SEC’s proposal would require that mutual funds have formal liquidity-management plans that must be approved by their boards of directors, the people said. It’s unclear whether the agency would set an industrywide threshold that triggers swing pricing, such as when withdrawals reach a certain percentage of fund assets, or allow fund managers or their boards to determine when the haircut applies.
Tiger FundThe SEC has been forced in recent years to grapple with mutual funds being vulnerable to runs that can harm other investors. In 2008, the U.S. government had to temporarily guarantee the assets of money-market mutual funds after panicked shareholders yanked $310 billion from money funds in a single week. The SEC responded with rules last year that allow money funds to temporarily suspend withdrawals or impose fees when a fund can’t meet redemptions.
BlackRock Inc., the world’s largest money manager, has supported swing pricing for mutual funds in its discussions with regulators and commonly uses it for European funds, according to the people. BlackRock has said that swing pricing has increased shareholder returns by as much as 2.5 percentage points by shifting trading costs to exiting investors in cases in which it was used. The firm has a committee that decides how much to charge investors for redemptions.
For example, BlackRock’s Asian Tiger Bond Fund generated a 7.11 percent return from July 2010 to June 2011. BlackRock adjusted the price for redeeming shareholders on 72 days during the period, according to a policy paper it published in December 2011. The fund’s return would have been 4.59 percent had it not changed the price that sellers received on those days, the company reported.
“If the SEC comes and says you can add this to your toolkit, I don’t think there will be a lot of handwringing because those who don’t want to do it, won’t use it,” Tuffy said.
hike 0.000000000000001% and call it a day. every one is happy and fed still got there credibility. Mickey Mouse econimics at it's finnest.
Hike. Detonation occurs.
Don't Hike. Detonation occurs.
Either way, heads will literally roll. Collapse inevitable.
No. Detonation occurs. Banking heads will be bank rolled with the tyrants in charge handsomely rewarded.
That is the way of the USSA.
optimist.
A rate hike, like the Fed, is largely irrelevant now.
That time has past, hedge accordingly.
Which is why I think they will kick the can again. A rate hike at this point will be seen, fingered or whatever as the catalyst for the next wave down. Why would they risk it? A .25 bump isn't ammunition, just a token.
More QE please
Is the hiking of skirts hemline a leading or trailing indicator?
What is the 200 day skirts hemline moving average telling Yellen?
If I was an adult at the FED house and I had knocked on D.C.'s door and told him he need to clean up his room with fiscal policy as his monetary policy of keeping the door closed so no one can see the mess was not going to fly in my house.
And I then came back years later and the door was still closed and odors were emanating from the room, I would knock the damn door down and take the rate hike belt to the little punk ass bitch.
if only the Fed wasn't political...
the "matresses" are being rolled out, make no mistake about it. About damn time.
Economissed.
Good one Tyler.
No hike - they missed the window (June-July).
And what the FUCK is all this shit about a mostly symbolic, tiny, lousy little
Point Oh Two Five 'HIKE'
Is this some kind of football play?
Looks increasingly like an audible called at the line of scrimage.
Probability of September rate hike... 0.00%
much ado about nothing
The fact that they are shitting in their pants over a measly .25 rate increase shows how totally lost they are. They are academics. Expect the worst.
20th century models applied to a 21st century problem.
Golly Gee, Homo Sapiens are smart Pa!
HERE WE GO !!!!!!11111111111
https://www.youtube.com/watch?v=eE-r0eOyvEA
https://www.youtube.com/watch?v=J78J-6PbhVo
https://www.youtube.com/watch?v=VQcPFpHLGGY
All this nonsense about NOTHING just makes me want to PUKE!
They obviously won't tighten. The global market is already tightening. We're already at the end of the credit cycle. The only thing to stop further tightening is to go negative or to start printing fuck loads of money again.
Notice, absolutely no mention of defaults experienced.
INFLATION = DEFAULT - INTEREST = zero under any proper MOE management process.
If they don't know defaults, they can't know what interest collections should be.
And inflation is not measurable ... just rigable. The only right value (and knowable value) for inflation is zero. Zero inflation comes from managing the MOE process according to the operational relation given above.
There will be no hike until December / March when Trump has consolidated more support from Blacks ands Hispanics.
Then the Fed will hike, cause a market and economic meltdown, creating huge socio-political probklems that only a "UNITER" like Jeb Bush can solve.
Even those will one feckin' gimlet eye can see this.
KOCHERLAKOTA: THE DOVISH DOVE
All this for a .25 basis point increase. Just beyond words.
Blow the fucking system up already so we can start over.
Increase Rates to 6% and we can call it a day...!
Everybody knows Fed is fucked no matter what. Dealers know it to but are masters at hypocracy. Same upward projections quarter after quarter. Mentally thats gotta take a toll.
the FED should sell their bonds till they sell out their balance sheet outright or the equivalent in gov paper till their balance sheet is zero or the ten year is at 5% whichever occurs later with a mandate of the S&P printing 666 before all is said and done then the FED steps away to the shadows as lender of last resort only able to be activated by a super-majority vote in the house and senate with a presidential veto option; call it a do over. pretend the last twenty years of monetary policy never happened and hope we come out on top from the chaos.
could you imagine the FED unwinding? thats some real end of dayz shit. if that ever happens its game over man.
Janet, Janet, Janet, what are we going to do. Well for us nothing..but I suppose you feel like the weight of the world is on your shoulders. On days like that... sometimes you need to just do something to help out... why not have a party... bring the punch bowl and celebrate... what... did you just say the punch bowl was empty...your kidding right?..oh Alan Greenspinach took some of the punch... oh... ben (has been here) bernanke also took some of the punch... wow... takes me by surprise... they got to party and you are left holding the punch bowl...well.. just don't stand there... it needs to be cleaned...what..you are not sure if it needs cleaning....well just clean .25% of the bowl...oh..you want to consult with others...how long do you think you will need...2 years.. :( well Janet.. I will let you onto a secret...you are the captain of the ship...this is happening on your watch...you need to make a decision.. captain, this is the officer of the deck... we are heading for an iceberg... it's your call Janet...oh one more thing... I would check with your doctor... he has medication for days like this....
If the Club hikes rates now beacuse it's the right time, then either they're really wrong NOW or they were really wrong BEFORE.
No matter which one is wrong, they're still Morons that have absolutely no idea what they are doing, just flying by the seat....
They have a choice? They can NEVER hike. That game is over.
Just financial "bread and circuses". There will never be another rate hike.