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Goldman Calls It: No Rate Hike Until Mid-2016
Several days before Thursday's FOMC meeting, we asked rhetorically whether "Yellen is about to shock everyone", and lo and behold: everyone was quite "shocked" when instead of a hawkish hold or a dovish hike, Yellen proceeded with the loosest possible decision: keeping ZIRP indefinitely, crushing both the Fed's credibility and its market "communication" strategy in the process, and sending the market tumbling. That said, not everyone was shocked - as we also reported one bank made the explicit case not only for no rate hike but for further easing - as first reported here last weekend, "Goldman said The "Fed Should Think About Easing."
This is what we added last weekend:
What one should most certainly pay attention to, however, is what Goldman says the Fed will do - you know, for "risk management" purposes - because as we have shown countless times in the past, Goldman runs the Fed.
As such, forget a September rate hike. Or perhaps Yellen will listen too carefully to Hatzius and instead of a rate hike, shock absolutely everyone, and instead of a rate hike the Fed will join the ECB, SNB and Riksbank in the twilight zone of negative rates. That, or QE4.
And why not: after both the Swiss National Bank and the Chinese central bank crushed investors who thought the banks would never surprise them, why should the Fed not complete the 2015 trifecta of central bank turmoil? After all, the money printers are already running on "faith" and credibility fumes. Might as well go out with a bang.
Not only is this precisely what happened (yes, the Fed gave its first ever NIRP hint ever) but more importantly, we got the latest confirmation that when it comes to policy, anything that Goldman wants, Goldman gets courtesy of a few clueless lifetime academics in charge of the US money printer.
With that out of the way, the only question that remains is not what will the Fed do, but what Goldman tells the Fed to do in 2015, or rather in 2016, because according to Jan Hatzius' latest note, one can forget about a hike in October or December, and instead focus on 2016, or rather the summer of 2016.
For the answer, we go straight to Goldman which in a rhetorical Q&A wonders "What were the most important things you learned from this week’s FOMC meeting?" to which the answer is "Mostly, the FOMC confirmed what we already knew."
Well, duh, the Fed merely read the script Goldman bad prepared - of course what the Fed confirmed what Goldman already knew. Although to keep appearances, even Hatzius had to pretend he was surprised:
That said, there were some surprises at the margin. The statement was even more dovish than we expected, especially with respect to global growth. And while both the committee’s economic projections and the median funds rate path were in line with our forecasts, several members—possibly including Chair Yellen—seem to have reduced the projected speed of hikes in 2016 from 100 basis points (bp) to 75bp. But overall, we think the basic message is intact, and the surprises at this meeting were much smaller than back in June, when we shifted our liftoff call from September to December.
Uh, as a reminder, Goldman said "the Fed should think about easing." How on earth can it be surprised by a "more dovish Fed", but yes, yes, we get that admission the Fed is controlled by Goldman destroys the narrative there are these "tinfoil conspiracy websites" who should be ignored because they allege just that.
In any event, here is Goldman's explanation when it would consider greenlighting a Fed rate hike:
Q: Is October on the table?
A: Not really. We believe that Chair Yellen’s baseline since the June meeting has been a December liftoff, and it would be very unnatural for her to pull forward given the information received in the meantime. Besides, there is only one round of monthly economic data on the calendar before then. Last but not least, the logistics are daunting. There will not be a fresh SEP, and the committee would need to announce an impromptu press conference in the October 29 FOMC statement announcing the rate hike itself; an earlier addition of a press conference to the calendar does not work because this would lead the market to conclude that the FOMC has decided to hike, without any room for explanation at that point. This all seems too sudden and dramatic for a Committee that, we think, would like the first hike to be as unexciting as possible.
Q: What could shift the liftoff into 2016?
A: Although we expect the conditions for liftoff regarding employment, inflation, and financial conditions to be in place by December, there is some risk of disappointment in each of them. Missing on any one of them would call December into question, missing on more than one would almost certainly shift liftoff into 2016. Regarding growth and employment, the data looked quite solid until recently but the early information for September has been weak so far. As shown in Exhibit 1, the average of the New York Empire State and Philly Fed index in September fell to the lowest level since the 2011 recession scare, and consumer sentiment also weakened significantly. These are all volatile indicators that could bounce back quickly, but we would put at least a bit of weight on the possibility that they indicate a larger-than-expected drag from the recent tightening in financial conditions and the weakness in global growth.
Finally, regarding financial conditions, our baseline expectation is an easing but the uncertainty is significant as always. And at least so far, the response of the financial markets to the FOMC—especially the sharp selloff in the stock market—has probably disappointed the committee’s expectations.
The punchline: Goldman no longer wants a 2015 rate hike, in fact any rate hike if it ever comes, will be in the summer of 2016:
Q: What is your own view of the appropriate liftoff date?
A: Our own answer to that question has long been 2016. In fact, our own view is similar to that of Chicago Fed President Charles Evans, who recently shifted his call from early 2016 to mid-2016. Although it is definitely possible to rationalize a December 2015 liftoff using various forms of the Taylor rule, there are two good reasons to delay the move longer. First, the risk of hiking too early is bigger than the risk of hiking too late when inflation is so far below target and we have spent so much time stuck at the zero bound. Second, we have seen a sizeable tightening of financial conditions. At this point, our “GSFCI Taylor rule” suggests that the FOMC should be trying to ease rather than tighten financial conditions. Our own view in terms of optimal policy is quite strongly in favor of waiting well into 2016.
And there you have it: no rate hike until mid-2016, which as we said previously, means no rate hike at all since the "apolitical" Fed will never hike just before a presidential election, and more importantly, by then the epic inventory liquidation-driven recession will have already started, making the only question that matters in the summer of 2016: NIRP or QE4. Everything else is noise.
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But then it will be election season and the Fed cannot change rates as it will be seen as a political move
No rate normalization during my lifetime Bernanke
Last rate hike was on June 29, 2006 when the Fed increased the fed funds rate to 5.25%.
http://money.cnn.com/2006/06/29/news/economy/fed_rates/
This new information from Goldman is good for a multi-hundred point rally on Monday. After all. Goldman writes Fed policy.
The linked SA article makes is entirely clear the Fed is simply fighting changes in the core population (15-64yr/olds). Rate hikes and cuts, periods of high and low federal deficits, are entirely correlated with periods of high and low core population growth. And even with continued lax immigration policies, the next decade is the historically lowest core population growth period since before WWII...and likewise for most advanced and many developing nations.
The Fed's policies to goose the good times during huge population increases and leave nothing for the inevitable slow growth periods we now face was the work of incompetents or very competent thieves.
There is nothing complicated or mysterious about it (nefarious is the word I'd choose)...
http://seekingalpha.com/article/3522366-demographics-the-real-opponent-the-fed-has-been-fighting-for-decades
So droll ... For at we fought a revolution under the banner of "no taxation without representation", yet think nothing of taxing unborn generations to support our standard of living.
Worse, no politician takes this up a a rallying cry, knowing we are so degenerate we don't even care enough about our progeny to give a damn.
A test: how many of us will give an inheritance to our children as big as the ones we got from our parents? Now, include the per capita amount of the national debt in your calculation .... Pretty grim, no?
My inheritance from my parents is divorce, broken family, a creed of pathological feel-good lies, and an unimaginably huge debt burden.
So I guess I'm not going to be passing down an inheritance that "big", no sir not at all.
I figured a September hike was assured, if only because I thought the FED wouldn't want to unleash the chaos that another hold would bring. I was pleasantly proven wrong. For the longest time I though we were headed for a slow rotting decline. I now sincerely think we could see a USSR '91 moment sooner than later. Seriously, how many times must history show central planning DOES NOT WORK. I truly think there's enough rich-but-not-in-the-big-club types who are going to play the role the Russian oligarchs played. These people need some form of markets economics to maintain their wealth and FED policy as is will ultimately drain them of their power. I find it interesting that Mark Cuban stated he could beat Trump or Hillary. He's probably right. Trump may or may not be a false prophet (and he is of dubious ethics either way) , but I think he does represent a class of wealth whose interests align somewhat with ours. The current Captains of Industry that are not part of the financialization and Central Bank theft must act to protect some form of a market economy lest they be relegated to sycophants of the bankers. The enemy of my enemy is my friend definitely applies. Grandma Yellen coming out fully as a Savior of international markets at what will CLEARLY be the expense of actual productive industry may be the best thing for us all.
I hear ya. I think even the enemy of my enemy analogy is kind of optimistic.
Maybe, on some level, the interests of guys like Trump and us plebs could align somewhat. I mean, if you let the host die, all the parasites die as well.
I just don't see it making any difference in the long run. I don't believe in process anymore. It's all fighting over scraps now.
Goldman gets what Goldman wants. Period. All the talk blah blah blah.... if they want QE4 they'll get it. Savers, pensioners, the 99% be damned.
"if you let the host die, all the parasites die as well."
unless they have a blood bank...and a new larvael host wriggling in the wings
Yup. That picture of Blankfein and Buffet together tells the story.
"Get back to work serfs."
There will be no Fed-orchestrated rate hike. When interest rates increase it will be without the Fed's approval.
Apparently nobody has explained ZIRP to infinity properly to Goldman
How can the US media and citizens be so naive, un-attentive and ignorant of economics to believe that a pirvate Central Bank, that is the Federal Reserve can run the US economy?
The people at the Federal Reserve are ALCHEMISTS!!
They believe that they can CONVERT PAPER INTO MONEY!!!!
WAKE THE FU.K UP!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
"They believe that they can CONVERT PAPER INTO MONEY!!!"
Its not just a belief, but a fact.
Their paper is converted from other people's money:
[No productive work performed] is [exchanged] [for people's productive work].
This is not alchemy, just theft.
They are not alchemists. They are God. Only God can create something from nothing.
Something can never be created from nothing.
Thus, the desire for a godlike quality such as this requires a brown nose, not red.
Don't be so harsh, NFL gametime is an hr and 15 mins away....
Don't forget to eat your GMO foods, drink fluoridated water, eat some toxic fast food, drink copious amount of poisonous soft drinks and cheer for your NFL team as the NSA wants it that way - bread and circuses. Perhaps, like a good slave, you can watch porn until the football game.
96% of NFL players studied show brain diseaseand 79% of all football players
http://www.pbs.org/wgbh/pages/frontline/sports/concussion-watch/new-87-d...
Well, there's always soccer, the original football.
Your preaching to the choir on ZH. Stop the screaming
Because the media is owned by the bankers who own the fed who own the politicians who all feed the same collective lies to the plebs who have been systematically stripped of any critical thinking capabilities. Jamie couldn't have said it better when he said "you may be poor but your brain has been replaced by iStuff".
I'm awake.
Au contraire, they regularly convert paper into money, when they even bother to do that. It's so much easier these days to just make ledger entries.
The real alchemy lies in the next step -- converting the money into wealth. These days, unfortunately, the creation of money has been divorced from any creation of wealth, so all that's left is redistribution of existing wealth from those at the back of the money-spigot line to those at the front.
Of course, the banking system is all over this dynamic like flies on $hit.
Sounds about right to me. I think that they want to keep the wheels on the cart until after the election in 2016 but it will be a challenge. We could have Obama and martial law by that time. If the mad max machine stays glued together my prediction is that Biden dilutes the primary vote and Hildabeast gets the nod. Then her buddy Trump throws in the towel as planned after a last minute gaff and Goldman wins again! See how easy that is?
They may have wheels, but the cart will have been destroyed.
this your 6-12 month final warning. the plan is to continue to loot everything between now and the end and then get out of Dodge.
And go to "not Dodge"? Where might that be?
Bond Vigilantes?
The bond vigilantes have been tamed. They'll be put in their place all the way to sub 1% on the ten year.
God's work...
Welcome to Japan America! There won't be any change worth mentioning until either the markets blow up, which they are perfectly capable of controlling, or some brave patriots (a lot of them) march on Washington and put these fuckers in jail.
Yeah, like there will be much of a market left by then.
Biggest issue on QE and ZIRP is the shit ain't workin'.
At some point the debt loads become so large that any minor knock to one of any number of key areas (stock prices, high yield credit, etc) and the worst of the worst becomes reality.
Why not just initiate that process now where at least it might be a bit more manageable?
She did initiate it. The worst of the worst was already here. By going uber-dove Yellen did the worst thing a politician can do, she told the truth. One wonders is they are trying to set off the crash without getting blamed for setting off the crash. Why else would you tell the world that the economy is so shitty not only is raising .25 is enough to destroy it, but to even continue talking about such a raise in even remotely concrete terms is economic suicide.
If I were a trader that'd be more than enough to send me flying to safety. Especially considering that the only tool left is more QE and the reason they tapered was because it became so fucking obvious that it WASN'T WORKING.
This mega dead cat bounce is going from a first floor awning right down to the sidewalk.
New FEd comment. We will raise in December but are unsure about the year.
BTFD they're gonna print money, so much money, money for everyone.
"BTFD they're gonna print money, so much money, money for everyone."
See some sarcasm in there,(: , there only will be digits entered and to the SAME people as always.
I hope that Lloyd and Warren should still be so jovial when they are being led to the gullitoine.
When I heard that the Global Economy was now a factor in raising rates in the US I knew that was the tip off it was over for sure. Talking about a rate increase from here on out is just for show. I don't see how people can now pontificate upon it without embarrassing themselves.
Yeah right, they're going to be raising rates in an election year. More like they'll be doing some sort of QE by then.
No rate normalization in my lifetime.
~ The Bernank
QE will take the form of a Negative Income Tax credit similar to 2010 but on a larger scale. How popular will that be during an election year. Who on either side will object to giving the proles a bonus during these hard times?
Fucking script writes itself... I only hope it coincides with a dump in the housing market so I can put those Consumer QE $$$ towards my down payment.
Told you so.
Called it two weeks ago.
lol
Caption:
-Lloyd, look what I've picked for you!
-Oh Warren, we don't need that script, we have found a much better way!
Fedman Sachs, doing God's work, to relieve you from your gold and money...
The Clowns are smiling, but deep down they are miserable. Buffett is not a happy man anymore, and you can see it in his face. He knows that everything is about to melt into thin air, frankly. And Blankfein has always known that everything is going to melt into thin air because he is an industry Jew.
Bait & Switch, motherfuckers.
ISIS has a message for migrants - kill Germans in their homes!
https://www.youtube.com/watch?v=JGpIwmI_xJI&feature=player_embedded
"...because as we have shown countless times in the past, Goldman runs the Fed"
'Goldman' as it were, runs U.S. foreign policy, 'containment' policy of Russia, and fairly well the entire Northeast political establishment.
Jesus Keeerist. Ya had a 50/50 shot. Everyone who guessed no is now a hero and everyone who didn't is quiet.
MEANWHILE, THERE'S A THOUSAND MORE IMPORTANT THINGS GOING ON, ON THE PLANET.
That last picture- I see alot of young starlets and bubbleheads taking selfies with their mouths gaping like they want to show off their dental work. It is supposed to illustrate how wildly exuberant they are, what wild and crazy girls they must be.
When Lloyd does it, it's just grotesque. This asshat is in charge?
Lloyd is a glorified Butler. A caretaker who expresses publicly the wishes of the money power who are Goldman Sachs shareholders. No more than an overpaid secretary who's loyalty to her boss is infinite.
There will be no rate hike. You had best prepare for NIRP.
This economy is coming down and there is not one damned thing which they can do which will stop it.
Enjoy some Jon and Vangelis while you watch. Laugh hearty. Good jazzy and uplifting..
https://www.youtube.com/watch?v=7kCCtHCSuCs
GOLDMAN is blathering, there will likely never (short a miracle) ever be another RATE hike.
Oh there most certainly will be a rate hike when the banksters are ready for it, not one day sooner.
Let's see, dot com in 2000, housing in 2008, and now bonds in 2016. The meat puppet occupant of the White House must be kept on a very short leash ... Financial crises ensure they comply with their masters' voices.
I was sure they would raise rates. The fact they didn't means they won't ever now.
"Goldman Calls It: No Rate Hike Until Mid-2016"
Nah, no way. No rate hike ever until after the recovery from either the next crash or after a long, deep decline in the world economy if a triggering event for a quick crash takes a long time to appear or is held off via more central bank manipulation.
http://news.goldseek.com/GoldSeek/1442494200.php
Try making up for a past mistake and make another? That’s playing from behind, if you will, and it’s not out of the question if you know the Fed’s history:
1. Not a single post-war recession has been predicted by the Fed a year in advance, according to former U.S. Treasury Secretary Lawrence Summers; and
2. Neither of the last three recessions were recognized until they were already under way.
Incompetent or ulterior motives for policy?
Regardless, here we are with expectations ramped up for a rate hike, as the rest of the world is easing.
What’s notable for investors is that since the 2008 crash, we have not been able to achieve new market highs without central bank stimulus. Full stop.
But it’s only a quarter point…
According to a study released by McKinsey Global Institute in February of this year, global debt has increased by $57 trillion USD since 2008. With such an enormous amount liquidity in the system (M1 money supply near lifetime highs) financial markets are increasingly becoming nothing more than a currency game; and the currency game is a relative one. I print, you print, they print, but who’s printing more and where is capital flowing in and out of? Within this context, a quarter-point rate hike would be much more than simply symbolic.
As we have seen since late 2012, the rise in the U.S. dollar has had major implications on global markets, whether it be currencies, commodities or interest rates. A rate hike would equate to further USD strength and will accelerate the deflationary spiral we have witnessed over the past few years. Raising rates into a slowdown could also place the U.S. firmly on a path to recession in 2016.
Conversely, no rate increase does not meet the expectations set by the Fed and will re-inflate commodities in the immediate term. Arguably, it pulls forward the possibility of QE4 as well.
So it seems the Fed finds itself in a self-imposed conundrum here: make a policy error and raise into a slowdown, don’t raise and openly recognize growth is slowing. Which brings me back to my previous point: since 2008, no new market highs have been achieved without central bank stimulus.
As always, government remains the No. 1 risk to financial markets, and I will change my views as the facts change.
“The Federal Reserve is not currently forecasting a recession.” – Ben Bernanke (January 2008)
Rates will be raised once the GOP win the White House so that they can be blamed for any collapse in the markets/economy. No rate hike until at least 2017...
FTFA--"Well, duh, the Fed merely read the script Goldman bad prepared"
The most glaring Freudian typo I saw.
It's almost like that trader was telling the truth in that video clip from September, 2011:
http://www.zerohedge.com/news/bbc-speechless-trader-tells-truth-collapse...
He just got the timing very, very wrong.
Martin Armstrong predicted a market drop for 2015.75
That would be around about next week...
And he predicted interest rates going up 2016.625
That would be about July 15, 2016.
Unlike GS, Armstrong doesn't mean 75bp... although
it might be 75 bp per month... or week... If that
sounds "Greek like"... that may be what he means!
I find it interesting that GS and M.A. are now on the
same page. In a stunning sort of way...
http://www.bloomberg.com/news/articles/2015-09-20/fed-officials-still-se...
Fed Officials Still See 2015 Liftoff Despite September Delay
By Jeanna Smialek and Sarah McGregor
September 20, 2015 — 1:23 PM EDT
- Williams: September FOMC policy decision was a `close call'
- Jobless rate expected to keep falling, inflation to rebound
Federal Reserve officials argued that an interest-rate increase is still warranted this year, laying out the case for liftoff in remarks over the weekend that counter bets by traders that the central bank will stay on hold until 2016.
Three policy makers separately explained their rationale for enacting a rate increase at one of the Fed’s two remaining meetings of 2015, citing declines in unemployment and other gains in the U.S. economy that should outweigh headwinds from slower growth abroad and turbulent financial markets.
San Francisco Fed President John Williams, a policy centrist who has worked closely with Chair Janet Yellen, said Sunday that “in my mind, it was a close call” to delay a rate rise at last week’s Federal Open Market Committee meeting.
Williams’ comments on Fox News Channel’s “Sunday Morning Futures with Maria Bartiromo” echoed remarks he made the day before, and chimed with the reasoning of St. Louis Fed President James Bullard and Richmond Fed President Jeffrey Lacker. Both weighed in on Saturday over the FOMC’s vote to leave rates near zero.
Mixed Messages
The central bank’s decision, and the way its deliberations were framed by Yellen in a post-meeting press conference, were interpreted by many Fed watchers as a sign that the central bank might not raise rates this year. In holding rates steady, the Fed noted international uncertainties and subdued inflation.
Traders say it’s more likely than not that the Fed will postpone liftoff until 2016, based on the current pricing of federal funds futures contracts.
Investors will hear directly from Yellen again on Sept. 24 when she delivers a speech in Amherst, Massachusetts.
Williams said on Saturday in Armonk, New York, that “I view the next appropriate step as gradually raising interest rates, most likely starting sometime later this year.”
He is in the majority. Quarterly Fed forecasts, which were updated for last week’s FOMC, showed that 13 of 17 policy makers still expect rates to increase in 2015. The projections, displayed in a so-called dot plot, don’t identify the forecasts of individual policy makers and Yellen declined last week to say which dot belonged to her.
The committee gathers next on October 27-28 and December 15-16. Its benchmark interest rate has been kept near zero since 2008 to spur hiring and investment amid the worst recession since the Great Depression. The Fed last raised rates in 2006.
2016 Liftoff
While Williams voted last week to leave rates near zero, Bullard, who doesn’t vote on policy until next year, argued for an increase at the meeting, he said Saturday during a speech in Nashville, Tennessee.
Holding rates steady yet again seems to have “created rather than reduced global macroeconomic uncertainty,” he said.
The FOMC’s goals have “essentially been met, but the committee’s policy settings remain stuck in emergency mode,” Bullard said.
The Fed’s twin objectives for its monetary policy are to achieve maximum employment and stable inflation, which it targets at 2 percent. The unemployment rate dipped to 5.1 percent in August. The Fed’s preferred gauge of price pressures rose 0.3 percent in the 12 months through July and has been under two percent for more than three years.
Williams said he expects the U.S. to reach full employment by the end of this year or early in 2016.
Upward Pressure
“Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term,” the committee said in its post-meeting statement.
Even with a small interest-rate increase, policy will remain highly accommodative and continue to place upward pressure on inflation, Bullard said Saturday. Williams said that while a strong dollar and the fall in oil prices over the past year have tamped down price pressures, those factors “should prove transitory.” He expects that inflation will move toward 2 percent in the next two years.
Lacker, an anti-inflation hawk, dissented in favor of higher interest rates on Thursday. He said Saturday that the Fed’s failure to tighten had raised the risk of “adverse outcomes.”
“An increase in our interest rate target is needed, given current economic conditions and the medium-term outlook,” Lacker said in a statement posted on his regional bank’s website. Lacker was the sole dissenter to the Fed’s decision.
‘Close Call’
Both Williams and Bullard said October is a possibility for an rate increase, even though there will be a relatively limited amount of new economic data -- including one jobs report and one Consumer Price Index reading -- between now and then.
“There is not a lot of data,” Bullard told reporters. “On the other hand, it was a close call at this meeting.” The Fed is “ready to go” in October if conditions warrant, he said.
Although traders are leaning against a Fed move for now, if markets don’t properly anticipate a rate increase when it arrives, “that doesn’t bother me,” Williams told reporters.
He said in his Fox News interview on Sunday that the Fed could stage a press briefing after its meeting next month if it decided to act. Yellen, who has said a rate decision is possible at any meeting, is not scheduled to hold a press conference until the December FOMC.
http://www.businessinsider.com/janet-yellen-press-conference-september-1...
["When asked if perhaps the Fed would never get off the zero-lower-bound, Yellen said she would be surprised if this were the case but could not rule it out."]
"but could not rule it out"
Do we have footage of that specific point in time of the Q&A ? The 'source'(a tabloïd, yeah I know) mentions this question amongst others ...without dwelling on it... gone down pretty well with the crowd it seems ... Or are they all too fucking jaded for it to have registered ? Nobody picked it up ...
Of course, not surprised by the statement, just by the ... 'candor' ...
Say; do they hand out Soma for the press at these meetings; along with cookies and a glass of milk ?
According to the transcript of Chair Janet Yellen’s FOMC press conference:
http://www.federalreserve.gov/mediacenter/files/FOMCpresconf20150917.pdf
ANN SAPHIR. Ann Saphir with Reuters. Just to piggyback on the global considerations, as you say, the U.S. economy has been growing, are you worried that given the global interconnecting this, the low inflation globally, all of the other concerns that you just spoke about that you may never escape from this zero or lower bound situation.
CHAIR YELLEN. So, I would be very-- I would be very surprised if that's the case. That is not the way I see the outlook or the way the committee sees the outlook. Can I completely rule it out? I can't completely rule it out. But really that's an extreme downside risk that in no way is near the center of my outlook.
Here is the YouTube clip from Chair Janet Yellen’s FOMC press conference:
https://youtu.be/Z5-Jc3l42-g?t=2390
["CHAIR YELLEN. So, I would be very-- I would be very surprised if that's the case. That is not the way I see the outlook or the way the committee sees the outlook. Can I completely rule it out? I can't completely rule it out. But really that's an extreme downside risk that in no way is near the center of my outlook."]
;-)
Thanks ... That's a premium quality bullshit forecast for the history books... Tyler should use it to give us a good laugh at same date next year...
cough*bullshit!*cough
http://www.reuters.com/article/2015/09/19/us-usa-fed-idUSKCN0RJ0VH20150919
A divided Fed pits world's woes against domestic growth
NASHVILLE, Tenn | By Howard Schneider and Jonathan Spicer
Federal Reserve policymakers appeared deeply divided on Saturday over how seriously problems in the world economy will effect the U.S., a fracture that may be difficult for Fed Chair Janet Yellen to mend as she guides the central bank's debate over whether to hike interest rates.
Though last week's decision to again delay an interest rate increase was near-unanimous, drawing only one dissent, St. Louis Fed President James Bullard called the session "pressure-packed" as members debated whether global uncertainty or the continued strength of the U.S. economy deserved more attention.
In the end the committee felt that tepid global demand, a possible weakening of inflation measures, and recent market volatility warranted waiting to see how that might impact the U.S.
Bullard, who does not have a vote this year on the Fed's main policy-setting committee, said he would have joined Richmond Fed President Jeffrey Lacker's dissent, and worried the central bank had paid too much attention to recent financial market gyrations.
Markets sold off sharply this summer over concerns about a slowdown in China and weak world growth, leaving Fed officials to vet whether that reflected a short-term correction or more fundamental problems on the horizon.
"Financial markets tend to wax and wane, sometimes suddenly. Monetary policy needs to be more stable," said Bullard, who in prepared remarks here to the Community Bankers Association of Illinois said he did not think the Fed "provided a satisfactory answer" to why rates should stay near zero.
The economy is near full employment, and inflation will almost certainly rise, Bullard said, leaving the Fed's near seven-year stay at near zero rates out of line with the broad economic picture.
In a statement Lacker said he felt the current low rates "are unlikely to be appropriate for an economy with persistently strong consumption growth and tightening labor markets."
However at least for now the Fed set aside such concerns out of deference to a different worry: that a weak global economy may pull down the U.S. Specifically Fed officials, including Yellen, said a dip in measures of inflation expectations was worrisome if it proves to reflect eroding confidence in the recovery.
The expectations of businesses and consumers about inflation is thought to play an important role in the actual pace of price increases, as well as in decisions about savings, investment and consumption that are central to economic growth.
San Francisco Fed President John Williams in remarks on Saturday laid out the case for caution, and suggested he and others now want more proof before a rate hike. Williams said he still expects rates will rise this year as the "disinflationary" impact of low oil prices and other outside influences fades, and the U.S. economy continues to expand.
Still, "getting some more clarity around what is really happening in the global economy, how is that affecting the U.S. economy, and also seeing continued progress in the U.S. economy -- these are all things I'm watching," Williams told reporters when asked about a possible rate rise in October.
Williams, who is among the regional bank presidents who does vote on interest rates this year, declined to specify whether he sees October or December as the appropriate time to go.
The Fed next meets in October and again in December.
Thirteen of 17 Fed members last week said they still expect to hike rates this year.