This page has been archived and commenting is disabled.
FOMC Stunner: One FOMC Member Forecasts Negative Interest Rates Are Coming To The US
The biggest shocker in today's Fed announcement is not that the Fed did not hike: that was telegraphed far away. It is highlighted on the chart below in red: for the first time ever, one FOMC predicts negative rates in 2015 and 2016. Was it permadove Kocherlakota: probably not, he is out next year...
In retrospect, this too should come as no surprise: over the weekend we asked if "Yellen About To Shock Everyone: Goldman Says The "Fed Should Think About Easing." The lack of a hike was not a shock, but the negative dot, oh yes.
And earlier today we hinted at just this: NIRP:
Q. Can an ON RRP operation have a negative stopout rate?
A. Yes
http://t.co/hRvY3Lx9eG
— zerohedge (@zerohedge) September 17, 2015
So: instead of QE4 - forget hikes - is the Fed going to shock us with NIRP in the coming months?
»
- 72016 reads
- Printer-friendly version
- Send to friend
- advertisements -
Yes.
Fuck you pay me.
I'm not touching Janet Yellen's dot.
....and what will prevent a run on the banks in this scenario? Time to start a continual digital-to-paper withdrawal drain for the next 3 months. NIRP my safe, bitchez
They are going to need to impose cash and capital flow controls first or else you won’t find a dime of cash around except in everyone’s mattresses.
This looks like beach head softening to me.
Negative rates huh? I thought negative rates were not legal under current US law for treasuries. I know this is the fed funds rate and not treasuries but normally they track pretty closely. How will they deal with the required divergence? I guess that guaranteed spread could be handed to the banks.
Bank run in 1, 2, 3. Deflation during the 1929-33 period was -40%. They know massive layoffs are coming and will be printing up a lot of cash for the banks and the top 1% to stay afloat. Same shit different year.
Trump playing the role of Herbert Hoover. One wonders if he will call his trade protection bill Smoot-Hawley. lol
I'm actually surprised it's taken this long. You know more than one are thinking about it. Only one has gone so far as to go on the record.
Actually make that two, I said months ago after the last Fed meeting, when Greece was the latest scapegoat, that we would see Negative rates before they hike the rates, if ever. Listen to what they say then expect the opposite!
Wayne Angell, Former Fed Governor, to Niel Cavuto Minutes ago,
Here's a quote from the book, A Nation of Deadbeats, by Professor Scott Reynolds Nelson concerning the great depression.
You may think a 4% loan is a low rate, but that ignores the relative primary rates being payed. Leveraged money in the hands of speculators pumping evaluations is a disaster waiting to happen IMHO.
I'm just a blue collar guy with little, but growing, knowledge of the exotic and complex finance industry and may be way off, so tell me how it's different this time, how this will not lead to failed banks and a depression???
Todja
Get ready for the Japanese model, right here in River City, folks.
Getchur bond income while you still can. Barbell it with gold.
Ray Dalio will NOT like this for his Rick Parity program
When will they PAY ME for my mortgage???
S'not the way it works. See, here's how it works. You pay them.
Look at the dots. All but one, voted for raising... so why didn't raise occur? Maybe the one was Fed Governor Blankfein?
the Longer Run looks like a Christmas Tree. So everything is fine.
It's called circling the drain.
"We're gonna have to kill our way out, OK?"
Guess they think people are not paying attention to the fact that treasuries are being dumped en masse by China and other BRICS countries? Our leaders will not address this problem until there is blood in the streets. Then they really get to take over. Hope they know what's waiting for them. Behind every blade of grass.
I know my deer rifle is a poor match against their drones, but I really feel like I need to go out for some target practice.
http://www.washingtonsblog.com/2015/05/why-the-powers-that-be-are-pushin...
Well shit, why didn't they implement this to a-bomb the war on drugs years ago? Nobody's 'guy' has a credit card swipe, nor will he take checks ;-)
Hafta nitpick. 'Snacks', one of my dealers, would accept credit and debit cards. I never used them, but the option was there.
that is awesome! I wonder what the CC transaction description looked like on the statement? Snacks......nice...now he'd get a 1099-k and file at least a Schedule C for his endeavors...
.
damn right plebes, time for you to pay off my mortgage
OH shit, say it aint so. This is a bad dream I cant seem to wake up from.
Hey. You're funny.
Saucer, Rocket, Sword, Spider, and Unbrellla. Those are the icons created from that chart? What does it mean? War? /sarc
No no, that's not an umbrella, it's a make believe Christmas tree. See, by this time in December, nobody'll have shit left except a few lumps of coal.
QE forever and negative interest rates will only exacerbate systemic reset and stock crash.
Its called a liquidity trap. See Japan
Fuck 'em. Short this bitch into the ground, just like that kraut pilot in the alps.
KOCHERLAKOTA!!!
It's not him. It's somebody who makes him look like a hawk.
Lmfao. Jesus christ this is a good day.
Its a trap!
It's always a fucking trap. it wouldn't work if it wasn't.
Agreed. Bought some PMs at 1:30 before the inevitable continuation of the scam
Negative is damn sure the forcast.
Yeah, especially once they've abolished currency.
NIRPdom for the serfdom.
Fuck this shit. I want NTRPdom (Negative Tax Rate Policy). I want my shit back, even if it is lousy fiat.
I know Jim Rickards isn't so popular in some circles but this is one of the many "bullets" he said the fed has left. This, more QE and helicopter money.
Stop saying that the Fed is "losing credability". Japan just started QE 10 and they seem plenty "credible" to the bond market, such as it is. Strap in, this rides' gonna be a long one.
Agreed! Helicopter money is definitely in the mix now.
Remind me again why gold is not budging.
Gold has budged and so has PM mining stocks.
If I paint a huge H on my roof, will they bomb my house with hundies?
roll the guillotines...it is the only way
Or, stand back and nuke 'em from orbit. It's the only way to be sure.
If an interest rate is at zero can we still call it interest rate?
+1
Technically no, because no multiple exists to calculate return over time. Theoretically, yes, because a price of zero for something used as a medium of exchange means the unit of exchange is worthless.
You remined me of Jim Grants joke about there not being any interest rates to observe (Grants Interest Rate Obsserver).
I'm gonna miss that guy when they arrest him for running a terrorist kiddie porn ring.
I watched an interview of Jim Grant the other day. He said he needed to change the name of his newsletter "The Interest Rate Observer" because we don't have an interest rate to observe.
Way too much logic and reason in that post for these "markets" mister!!
No. We shall call it QE to infinity (free bankster money).
<-- ZIRP: Indifference Rate
<-- NIRP: Disadvantage Rate
Interest rate of zero implies infinite savings or bandits prowling the lands stealing everything from anyone they meet while leaving banks alone. NIRP implies the same, just more of it.
Well, we don't have infinite savings, so....
So, you pay me to put your money to work?
No, you pay the bank to safeguard your money.
Problem is that they are the same guys running around in the streets robbing everyone. Mostly. More people will be stealing from desperation too as time rolls on under the genocidal oppression of Z/NIRP
The bank doesn't have a vault full of dollar bills, they can only do one thing: invest your money. Put it at risk (even money markets have a non zero risk.) So you are paying them to put it at risk.
If an interest rate is at zero can we still call it interest rate?
Think of NIRP as a black hole. Sucking everything in including light.
We're heading to another dimension. Just like Sam Neill did in Event Horizon.
https://www.youtube.com/watch?v=giiuqTdBSTc
What do you mean "heading in"? We're there.
Janet Yellin looks like she works for Willy Wonka
She obviously packs an Everlasting Gobstopper in each cheek.
Janet's perfect for the job. Takled for an hour and a half and the only things she said were "the 99%ers can go f*** themselves" and "we're now looking out for rich people globally."
If they didn't raise this time, when they so obviously missed their window, i guess NIRP is the only remaining option. And the secular stagnation drags on...
keep stacking, brothers and sisters.
Until the sheep wake fuck up with pitchforks, the beatings and robbings will continue.
I think the sheep are in a coma bud.
Either that or we need to reenact the Monty Python dead parrot sketch with a flock of sheeeeeep
No need, they already provided us with the flying sheep sketch.
Actually, I see more of a deer-in-the-headlights look...
since we can't exit "fed policy" someone decided to exit "denial"
So are they going to pay me to buy a car or some farm land or is that only for the banks?
What do you think? You missed your chance when you didn't trade in your clunker.
What a fucking clown show. The fed has zero credibility.
Credibility is irrelevant. Long live the Fed put!
no, not a shocker.Why should this shock?
These clowns can't raise rates. You saw how the entire nation of China and the IMF were crying for their mommies. Rates won't go up until the millennium reaches the age of majority.
The only way that changes is if they want to flush a president, congress, both or start dystopian scenario program 1.0
S'truth
Ole Yeller reminds me of the cute little monsters on the movie: Galaxy Quest. Something bad is going to happen.
Fun fact about Galaxy Quest: when it came out, patrick stewart refused to see it. He was proud of star trek and thought GQ was just a smear job. One of his friends finally made him see it and he thought it was brilliant. He then made the rest of the cast of TNG go see it.
When you have infinite debt, NIRP is inevitable
US debt has increased from $60 trillion in 2003 to $210 trilion in 2014 per Kotlikoff. US interest rates cannot be increased without sinking the US budget and economy. After ZIRP comes NIRP.
QE forever.
FOMC Stunner:"One FOMC Member Forecasts Negative Interest Rates Are Coming To The US"
Nah! That is exactly what they will do!
That's just a tip off, of what is to come.
They ain't going up!
NIRP is to be expected. What really cracks me up is that one of them sees 4% in 2017. WTF are they smoking?
You know in 3rd world countries how they all just sort of reflexively say things like "Viva la revolucion!" or "Death to America!"?
It's just something they say out of habit after a while, not because they really mean it.
BTW- Mmmmmm.... beer.
Congrates. I hope Fonz's investing record is better than his betting record. ;-> Do me a favor, introduce him to a real beer will ya?
I think he's as clueless as the rest of us. Since he's buying the first round I expect he'll get me a warm Natty Ice served up in a dirty ashtray.
Ain't that the truth? My kids will tell you how clueless I am. They tell me enough.
I've been hearing lots of that on European TV but it goes, "Death to America, Allans Snackbar" or something like that.
Perhaps he meant to say -4%
Re: "NIRP is to be expected. What really cracks me up is that one of them sees 4% in 2017. WTF are they smoking?"
By now they've figured out they can say anything they damn well please. So why not have a little fun?
NEgative interest rates make PMs look really sweet
time to buy some more physical ag - nirp this, b___h!
These arrogant charlatans mf'ers can't and won't let the stock market to drop -not today and not in the future.
Of course thay can't. Bonds neither. Too many pension funds, insurance companies, and financial institutions have bought into the ZIRP program. Can you imagine how much hell would break loose if those funds were to take that kind of a hit?
Someone above already said it. It's ZIRP until the Millenials.
Can't wait to take out a 0% interest mortgage loan lol...
0% is not for you, you dope.
It was satire, moron.
I knew it was satire you moron. I was satirical also
You mean we plebes won't get the zero interest rate?
Uh huh
nah. i went and checked at the bank about a home equity loan. they wanted over 5%, and there's penalties for paying it off early. And, the min. amount is 25k. BUT, i make a whopping 0.1% interest on my deposits there. HEY, TDBank. suck my deposit. I'll be lowering that deposit down to the minimum soon, assholes. Time to buy overpriced, overleveraged, underperforming stocks with a BTFD with both hands mentality. Hell, Janet and company has got my back. No interest rate raises. Go long stocks until Armageddon.
Anybody know how to say "bank run" in yiddish?
lehman?
It sounds something like "fukchem", not entirely sure of the spelling.
I think it loosely translates to "Lock the doors if you see any goyum."
"Mises". Colloquially "Friedman"
Physical cash money or physical gold/silver. Nothing else will do. Gold has to be preferred at this point what with talk about outlawing cash.
Guillotines are too good for the bastards.
Craig
If they outlaw cash, what will become of any cash on hand? Would we be expected to turn it in to a local bank? Obviously no more cash would be made available, but what if people simply dind't hand their cash over?
Because if it doesn't work, just keep doing more of it, not matter what the long term risk. The U.S. actually needs Japan to blow up to prove that the world is on the wrong path, but it is past the point of no return now for everyone.
These *uckheads act like financial markets have collapsed, unemployment is 30% and we are at war with the level of stimulus they are pumping.
After negative rates, come capital controls as people start removing currency from the banking system. Goodbye to any semblance of liberty and freedom. Time to buy a gun and sign up for firearms training.
"The U.S. actually needs Japan to blow up to prove that the world is on the wrong path"
I think that's actually a good point.
Of course, by then all the other countries will be inside the event horizon of the debt black hole- there won't be any escape even if they wake up and realize exactly what the problem is.
I had guns at one time, but I left my tailgate down on drive home from a hunting trip and lost them all out of the back! I was so bummed. Somebody must have picked them up because I never found them.
Between that and the boating accident, you're one hell of an unlucky guy
Drugs gambling and prostitution are about the only three things for self funded retirees left to invest in.
Ughhhhh. :::shudder::: The casinos around here are all full of old people already.
Vote all the politicians out. End the Fed scam.
hahaha, run run run; we are now in a situation where the stawks spike is sitting on the Saint Andreas fault !
The big one?
"Burn baby burn", as Palin would say, given that "drill baby drill" has lost its oompha!
Dr Yellen is yelling : I'm mellow yellow! and may the devil take the hindmost; my job is to print to save the Oligarchyyyyyyyy...
The one thing the FED cannot allow is deflation! I am shocked they did not raise rates. It was sort of then or never.
NIRP is going to hurt savers. So the question is, do you let them eat your money in small bites or -- lose it all in the markets?
The unknown is the housing market. With rates this low, the HAMP resets will never kick in and that is about 1 million homes over the next three years.
It does sort of look like the FED is painting themselves into a corner.
Or put it in treasuries and hope the US does not default when the dollar dies
Or put it in hard assets like land or gold and just hope those forcasting runaway inflation are right.
Or buy land and assets in countries that are more economically responsible.
Or...
The unknown is the housing market. With rates this low, the HAMP resets will never kick in and that is about 1 million homes over the next three years.
I think it's a pretty big fucking known. Those resets will cause inventory will rise. Rentals will get crushed as more and more people leave the larger cities as your SSI and Food Stamps go a lot further in the exurbs. This will create further inventory and pricing pressures. What we're seeing in the energy markets is coming soon to residential RE. Deflation is here. Raising rates likely could have slowed the velocity. Standing pat is going to accelerate it as will more QE. We now have a COMPLETELY bifurcated economy of Sky high equities and luxury RE functioning as mediums of exchange for the oligarchy while everything else finds it's market level several times lower than where it is now.
Zimbabwe and got nothing on us (U.S.)
Now I have to shave my balls till the next meeting!!!
So does Janet!
I AM SHOCKED!!! Lol hehehe
No surprise there really, when said the would raise rate a few years ago, seemed unlikely, then end of 2014 they said rate would rise in Mar 2015 (roughly), then when it was supposed to be any month since then but almost certainly Sept, seemed like just a buncha horse hooey. Now I read today that are looking to raise rates by end of year (and this latest piece of agitprop, that there may be neg rates). As has been said many times on this site, the FED has no credibility left. What a farce.
http://www.bloombergview.com/quicktake/negative-interest-rates
In theory, interest rates below zero should reduce borrowing costs for companies and households, driving demand for loans. In practice, there’s a risk that the policy might do more harm than good. Janet Yellen, the U.S. Federal Reserve chair, said at her confirmation hearing in November 2013 that even a deposit rate that’s positive but close to zero could disrupt the money markets that help fund financial institutions. If banks make more customers pay to hold their money, retails clients may put their cash under the mattress instead. When banks absorb the costs of negative rates themselves, it squeezes the profit margin between their lending and deposit rates, and might make them even less willing to lend. Ever-lower rates are also raising concern that countries are engaged in a currency war of competitive devaluations as investors shift their money to places where it earns more.
Well, I'm not keeping my money in a bank if they charge me to keep it there.
In real terms they already are...
Which is exactly why they are trying their damndest to steer us to a cashless society... so you can't take your money out of the bank. Your paycheque gets deposited there automatically... but you can't take it out... they want you to spend it. Dirty, dirty, dirty rotten fuckers that they are. But you're quite right... why would anybody keep money in a bank? Cash and precious metals would become king, without a doubt.
NIRP---the last push.....maybe after a while it wasn't so bad to keep money on the sidelines, making nothing....but paying to keep it there when everything is just going smashingly in the markets....ummm good to the last drop.
Three years ago I was suggesting they might in the end resort to "honest to god negative interest rates."
It scares me how right I've been, all along. What's scary is that my outlook for things is waaaaaay to the far side of apocalyptic. If The Fed and the global economy keep veering toward the darkness the way I've suggested might happen (is happening) then this is going to become a shit storm for the ages. Nobody will get out whole, not with their wealth anyway.
well I've always been an optimist (within reason) but today I'm eating crow--I was convinced the rate had to go up and that it would start today--- wrongo-- The trend is toward savings and middle class destruction with lawlessness, political corruption and treason in the halls of gov't de rigueur.
I've changed my plans before and I can do it again--not a problem- I'm just so sad that my kids will be living in a Fascist Police state.
they already do! We've had fascism for about 3 decades now. It was hidden behind we'll articulated fascades. But, as things unravel, they've done things like arm the police with tanks and rocket launcers. And instituted outright theft with TARP/QE/ZIRP. It's all coming to a head soon, and the fascists are thieving every last trinket and bauble. It's ruins from here on out.
The toxic zombies won ... ... it's as simple and as un-utterable as that, bitchez.
What's so shocking, look at the interest rate chart. It's the mother of all 'head and shoulders'!
LMAO!
With a joke like the much-over-hyped .25% rise not happening, this is the perfect punchline.
Absolute comedic genius.
Is this a "real" rate target? Or is it a suggestion by at least one member that they attempt to ACTUALLY produce negative nominal rates?
Uh uh. Buy $TLT and enjoy a nice ride while getting paid. Hey, it's what the house buys with unlimited liquidity.
We are Sweden now?
I believe you mean Switzerland ... they have official NIRP
Ah, I forgot about them! Thank you! I was referencing Sweden a few years back, and recently (if I recall correctly). And, also that Sweden was now the rape capital of Europe, where we are ostensibly now all financially raped.
Treasury zeros trading at a premium! I guess paper money is the next thing to be outlawed!
so..... if I borrow $100.00 I only have to pay back $99.00 ?
I must be in htraE
In the Bizarro world of "htraE" ("Earth" spelled backwards), society is ruled by the Bizarro Code which states "Us do opposite of all Earthly things! Is big crime to make anything perfect on Bizarro World!" In one episode, for example, a salesman is doing a brisk trade selling Bizarro bonds: "Guaranteed to lose money for you".
https://en.wikipedia.org/wiki/Bizarro_World
Suwee, suwee, suwee, moar QE!
Get the hogs to the trough!
Every reason to own some PM regardless of what you may think of them.
The Toyota dealer called me a few minutes ago. Zero interest on new 2015's and 2016's along with great cash rebates.
The "New GM" called me and said I can get any vehical for ZERO DOWN, ZERO INTEREST RATES for 120 MONTHS and 50% DISCOUNT with ZERO CREDIT!! Top that!!
And if I act before the end of September; I get 120 months free gasoline and free maintenance and free tires and a free extended warranty.
Umm, EXCUSE ME, but if one wants to just go back to one of yesterday's threads when I said, "This turkey is gonna go NIRP."
I went to ART SCHOOL!
And even I can figure this stupid shit out!
Let us know the day, the week or the month when it happens officially; just to make sure your prophecy is accurate.
nirp and moar qe are a given
The world shouldn't be held hostage by the US Federal Reserve. The market should set short term rates not private bankers concerned about their personal wealth. When put that way, it's clear the US economy is also held hostage by these parasites. Plus ZH'ers know very well that the insider elites get the rate telegram and public policy plans well before the public. How else would GS and the other major banks make money every trading day of the year. It's an impossibility without inside information. No more war, no more global chessboard, and no god*%^m tracking devices in my car and spyware on my computer. This government has to go.
The market should set short term rates not private bankers concerned about their personal wealth.
In any properly managed MOE process, it's not the market or the bankers that determine INTEREST collections. It is DEFAULTs.
Money is "a promise to complete a trade". It is created by traders making promises and getting them certified. It is destroyed when they deliver on those promises. Anyone who has bought something on time payments knows the process.
If a trader fails to deliver as promised, that is a DEFAULT. DEFAULTs must be immediately recovered through INTEREST collections of like amount to guarantee zero INFLATION.
The operative relations is: INFLATION = DEFAULT - INTEREST = zero.
You need to seek the place of refuge where sin is not allowed; only truth and righteousness. All else is futility or vanity; like grasping at the wind. Most people are too stupid to understand what is in their face all around them.
Who owns the negative dots?
Why the guy running the show, of course: Stanley Fischer.
The common people of the US have had negative interest rates for a long time now. You have not been able to get a return on your savings account for decades.
But what happens when the large "asset classes" go negative? Karma for the elitists and their shitty system.
What's so funny about peace, love, and some reasonable fucking deflation after years... decades... of wealth going to the top 1%, of jobs going to foreign-born, and of sales tax paid on after-income tax that is also stealth-taxed as inflation has robbed me of the full and fair value of my labor?
You know - thank the gods I can survive in the woods indefinitely.
5 years ago I laughed at tin foil nutters and their zombie scenarios.
Now - I don't see how we can avoid it, unless and until the US military, below the generals, throws the brakes on this thing before we're all the way to the cliff...
unlikely, in my estimation.