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FOMC Minutes Confirm Economy Not Ready For Rate-Hike This Year, Worried About Inflation, "Global Risk"
Given the tumble and stock save since September's infamous "chickening out" FOMC Meeting, investors hope today's minutes will provide some color on just how close Janet and her merry men were to pulling the trigger:
- *FED OFFICIALS SAID `PRUDENT' TO WAIT FOR CLARITY ON OUTLOOK
- *FOMC MINUTES: MOST PARTICIPANTS SEE LIFTOFF CONDITIONS MET THIS YR
- *FOMC MINUTES: ALL BUT ONE MEMBER SAID ECON COND DIDN'T WARRANT HIKE
With all the blame pinned on global turmoil (which has now "calmed" apparently) the S&P 500 has roundtripped to unchanged post-FOMC and given these minutes which suggest this was not a close-call at all. However, this was before the Sept payrolls data.
Pre-FOMC Minutes: S&P Futs 1988.25, 10Y 2.095%, Gold $1145, EUR 1.1285
* * *
More headlines:
- *SOME OFFICIALS SAID STOCK-PRICE DROP REFLECTED HIGH VALUATIONS
- **FOMC MINUTES: MANY MEMBERS SEE LIFTOFF CONDTNS MET THIS YEAR
- *SOME OFFICIALS SAID PREMATURE RATE RISE WOULD HURT CREDIBILITY
* * *
Pre-FOMC Minutes, Fed Funds Futures implied the following odds of a rate hike...
Gold and the Long Bond have notably outperformed since the FOMC Statement as the S&P has rallied all the way back to unchanged... (Silver & Crude are both up 5% since the FOMC Statement).
Charts: Bloomberg
Here are the key sections from the minutes:
The summary assessment:
After assessing the outlook for economic activity, the labor market, and inflation and weighing the uncertainties associated with the outlook, all but one member concluded that, although the U.S. economy had strengthened and labor underutilization had diminished, economic conditions did not warrant an increase in the target range for the federal funds rate at this meeting. They agreed that developments over the intermeeting period had not materially altered the Committee’s economic outlook. Nevertheless, in part because of the risks to the outlook for economic activity and inflation, the Committee decided that it was prudent to wait for additional information confirming that the economic outlook had not deteriorated and bolstering members’ confidence that inflation would gradually move up toward 2 percent over the medium term. One member, however, preferred to raise the target range for the federal funds rate at this meeting, indicating that the current low level of real interest rates was not appropriate in the context of current economic conditions.
Blame China:
- ... recent indicators for some other countries, most notably China, were subdued....
- ... Although U.S. economic data releases generally met market expectations, domestic financial conditions tightened modestly as concerns about prospects for global economic growth, centered on China, prompted an increase in financial market volatility and a deterioration in risk sentiment during the intermeeting period....
- ... A material slowdown in economic growth in China and potential adverse spillovers to other economies were likely to depress U.S. net exports to some extent....
- ... In addition, concerns associated with developments in China and other emerging market economies had contributed to a further appreciation of the dollar and declines in prices of oil and other commodities, which were likely to hold down U.S. consumer price inflation in the near term...
- ... Members noted that recent global and financial market developments might restrain economic activity somewhat as a result of the higher level of the dollar and possible effects of slower economic growth in China and in a number of emerging market and commodityproducing economies....
... Coupled with concerns about credibility:
Some participants were concerned that the downside risks to inflation could be realized if the target range for the federal funds rate was increased before it was clear that economic growth would remain at an above-trend pace and downward pressures on inflation had abated. They also worried that such a premature tightening might erode the credibility of the Committee’s inflation objective if inflation stayed at a rate below 2 percent for a prolonged period.
The biggest lie:
During their discussion of economic conditions and monetary policy, participants indicated that they did not see the changes in asset prices during the intermeeting period as bearing significantly on their policy choice except insofar as they affected the outlook for achieving the Committee’s macroeconomic objectives and the risks associated with that outlook.
And finally this is why the minutes are no longer relevant:
Members agreed that labor market conditions had improved considerably since earlier in the year, with ongoing solid gains in payroll employment and the unemployment rate falling to a level quite close to their estimates of its longer-run normal rate
This will hardly be the case after the lousy September payrolls.
Full FOMC Minutes below...
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Schrodinger Fed.
ZIRP will cause collapse:
http://www.safehaven.com/article/38731/zirp-leading-to-economic-collapse-much-higher-gold-and-silver-prices
Another load of shit from the Fed.
"Liftoff" and "Recovery"...
Just keep sayin it, throw it on the wall and see if it sticks.
Shut the fuck up Donny. If Au/Ag don't slide on this news, something is up....
"Surprise, surprise...."
- Gomer Pyle -
BOHICA......
Bullshit......no rate hike ever again.
HA HA, ECONOMY READY FOR RATE HIKE THIS YEAR, THAT MAYBE THE FUNNIEST SHIT I HAVE READ .
LETS SEE,
0 PERCENT THEY RAISE IN OCTOBER, AND THERE IS 0 CHANCE THEY RAISE DURING HOLIDAY SEASON, SO THAT TAKES AWAY NOVEMBER AND DECEMBER.
SO YA, THERE WILL NOT ONLY BE NO RATE HIKE THIS YEAR, BUT NONE IN OUR LIFETIMES. MOVE ALONG AND FUCK EVERYONE WHO WORKS AT THE FED OR WHO FUCKING SUPPORTS THE FED
and Dow 17,000 just like that......
Do not forget that ZERO percent during election cycle...can anyone believe that Hilarry is making promises on top of promises and some are buying this bull crap; who are these people that like people that have NO redeeming qualities whatsoever.
Here we go again... it just doesn't get old he?
WOLF!!! WOLF!!!
The Greece shit-show is much more entertaining than this...
Just one word applies, and that is bullshit. They know what would happen to the financial sector with even a small rate hike and don't want be holding the murder weapon when it all falls apart.....
Russia is the "desired" scape-goat and the real enemy is China, but one problem...Russia & China are joined at the hip; so Alex "I'll take Germany as Plan B" for $1500.
Nesxt up - NIRP!
I call BullShit. Can't taper a ponzi. Just buying more time. Biggest con job of all time. Public has been swindled. The take over is nearly complete.
Did they just copy and paste the previous 200 meetings? The same old BS that showing they have no clue what is going on and have no clue what they should do. Just another day the ass talking to the mouth or the other way around. both holes smell like shit.
One of these years the fed fund futures market will finally figure out that we are Japan and finally stop pricing in a rate hike ever.
Bullish of course
Fraud must be proved by showing that the defendant's actions involved five separate elements:
(1) a false statement of a material fact
(2) knowledge on the part of the defendant that the statement is untrue
(3) intent on the part of the defendant to deceive the alleged victim
(4) justifiable reliance by the alleged victim on the statement
(5) injury to the alleged victim as a result.
Is there still any question as to what the Fed is engaging in?
Earning season/layoffs/CAPEX cuts should remove all doubt, one way or another.
Accommodative (Adj.): Willing to adjust to differences in order to obtain agreement
The FOMC meeting minutes used the phrase "accommodate or accommodative" only EIGHT times. (In order received)
1) Financing conditions in consumer credit markets remained generally accommodative
2) Growth in real GDP over the first half of the year was stronger than participants expected...with appropriate policy accommodation, the pace of expansion of real activity would remain somewhat above its longer-run rate over the next two years and lead to further improvement in labor market conditions.
3) they continued to expect that, with appropriate policy accommodation, economic activity would most likely continue to expand at a moderate pace.
4) This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.
5) the Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace
6) This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.
7) When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals
8) (In relation to Lacker) In his view, further delay in removing monetary policy accommodation would represent a risky departure from past patterns of FOMC behavior
Friday will be a big SELL-OFF - maybe :)
And the market loves it!
One little interest rate hike, Ms. Yellen...
are you shitting me...?
http://m.youtube.com/watch?v=RXhKpUfITV0
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