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Fed Mouthpiece "Explains" Janet Yellen's "Less Dovish" Hold

Tyler Durden's picture




 

“Helm, warp one, engage!” 

There aren’t many things you can count on in this crazy world, but one constant is Jon Hilsenrath’s hallmark lightspeed, embargo-assisted copy editing skills and make no mistake, it’s a good thing Hilsy can turn a 539-word FOMC statement into a 593-word article because with all of the confusion going on in the Eccles Building these days, someone has to explain things to the world - and quick.

Below, find the Fed whisperer's latest, in which he attempts to come across as less befuddled than the central planners he's writing about when it comes to explaining how Janet Yellen and co. have become the embodiment of the "deer in headlights" meme now that their new reaction function includes an admission of their own reflexivity. Here's Hilsenrath on what certainly looks like a "less dovish" hold.

Via WSJ

Federal Reserve officials Wednesday kept short-term interest rates unchanged near zero, but opened the door more explicitly than they have before to raising rates at a final 2015 meeting in December.


In a statement following a two-day policy meeting, Fed officials suggested they had become less concerned in recent weeks about turbulent financial markets and uncertain economic developments overseas.

 

They also pointed specifically to the next meeting as a time when they would be assessing whether it was time to raise rates.

 

“In determining whether it will be appropriate to raise (interest rates) at its next meeting, the (Fed) will assess progress-both realized and expected-toward its objectives of maximum employment and 2 percent inflation,” the Fed said in its statement.

 

The reference to the next meeting effectively meant the Fed’s decisions about rates are now being made on a meeting-to-meeting basis, though they stopped short of committing to an immediate move.


Officials struck from the statement a sentence introduced in September which pointed to market turbulence and global developments as a potential restraint on U.S. economic activity.


That doesn’t assure a rate increase this year, but it reduces an impediment officials had stressed in September as standing in their way.


The central bank said Wednesday that it is still monitoring financial markets and developments abroad, meaning it isn’t yet confident these threats—such as the economic slowdown in China—have fully receded.


Still, officials pointed to “solid” growth rates in consumer spending and business investment and improvements in housing as bright spots in recent economic developments.


The Fed pushed short-term interest rates to zero in December 2008 and has kept them there for 82 straight months.


Officials began the year signaling a rate increase was likely in 2015 as the job market improved and slack in the economy diminished. Though job growth largely lived up to hopes, inflation has been lower than officials expected, stalling the Fed’s plans to raise interest rates.


The air has cleared a bit since September. For example, the Dow Jones Industrial Average is up 5% since the last meeting, a sign financial markets stress has dissipated. Yields on 10-year Treasury notes have dropped, as has the cost of investment grade corporate debt, while the dollar has strengthened.


Still, economic data have been unsteady, a point officials acknowledged in their statement Wednesday.


Most notably, the Labor Department reported a disappointing jobs report earlier this month. The Fed said job gains had slowed. On balance, however, they didn’t appear very alarmed about the soft jobs report.


“Labor market indicators, on balance, show that underutilization of labor resources has diminished since early this year,” the Fed said.


Other obstacles potentially stand in the Fed’s way. Officials noted in their statement that expectations for future inflation—as measured in bond markets—had receded “slightly” further in recent weeks, a sign investors don’t expect a rebound in consumer prices soon.


Fed officials watch inflation expectations closely, because expectations can affect the prices individuals, businesses and investors actually demand for goods and services.


Fed officials said, as they have before, that they won’t raise rates until they become “reasonably confident” inflation will raise to their 2% objective after running below it for more than three years.


They also want to see “some further improvement” in the job market.


Jeffrey Lacker, President of the Federal Reserve Bank of Richmond, dissented, as he did in September. He wanted to raise the Fed’s target interest rate, called the federal funds rate, by a quarter percentage point.

 

The Fed’s next meeting is Dec. 15-16, the final meeting before year-end. Officials will update their forecasts for the economy before the meeting and Fed Chairwoman Janet Yellen will hold a press conference after its conclusion

 

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Wed, 10/28/2015 - 14:11 | 6722219 Jethro
Jethro's picture

Maybe next time Mr. Yellen will stroke out entirely on stage.

Wed, 10/28/2015 - 14:19 | 6722276 LetThemEatRand
LetThemEatRand's picture

Now that would be some proper bukkake theater.

Wed, 10/28/2015 - 14:22 | 6722301 khakuda
khakuda's picture

I don't think that is what he meant :)

Wed, 10/28/2015 - 14:50 | 6722489 Jethro
Jethro's picture

I laughed like a retard at that....damn

Wed, 10/28/2015 - 14:11 | 6722220 booboo
booboo's picture

He had it written and submitted last night after a rowdy romp in the sheets with Janet. *Hmmph*

Wed, 10/28/2015 - 14:13 | 6722227 devo
devo's picture

Cliff's notes: Ctrl + P

Wed, 10/28/2015 - 14:12 | 6722228 Bill of Rights
Bill of Rights's picture

This gives me another opportunity to buy more gold on the cheap...thanks Central planners.

Wed, 10/28/2015 - 14:13 | 6722232 Racer
Racer's picture

They are so scared they can't raise rates by one quarter of one percent after many years.... Scaredy morons

Wed, 10/28/2015 - 14:15 | 6722246 devo
devo's picture

Wouldn't you be scared if you were monetizing 19tril of debt?

Wed, 10/28/2015 - 14:18 | 6722262 Hohum
Hohum's picture

They should be scared.  If the ecomomy isn't functioning well now, why would it after a rate hike?  Debt makes the world go round.

Wed, 10/28/2015 - 14:15 | 6722247 Seasmoke
Seasmoke's picture

Mind boggling. Insane. Criminal.

Wed, 10/28/2015 - 14:20 | 6722253 Dr. Engali
Dr. Engali's picture

You know, I could almost respect these people a tiny little bit if they just came out and said the truth, "the eCONomy sucks, and we can't justify a rate increase". Instead they try to treat us like we're fucking stupid and say "the eCONomy is looking more robust and we are going to increase rates any day now even though every other central bank in the world is fucking cutting". What a bunch of pricks.

Wed, 10/28/2015 - 14:37 | 6722401 Crocodile
Crocodile's picture

That is called politics and with that comes lies and corruption, which is why the FEDS say they are not politically influenced, which is both a lie and politically motivated.

Wed, 10/28/2015 - 14:16 | 6722256 Mick Shrimpton
Mick Shrimpton's picture

Rates will be raised in January 2017.

Wed, 10/28/2015 - 15:11 | 6722626 CoolidgeLives
CoolidgeLives's picture

Rates will be raised never.

Wed, 10/28/2015 - 15:47 | 6722836 cougar_w
cougar_w's picture

NIRP is our future.

Wed, 10/28/2015 - 14:21 | 6722269 piss pants
piss pants's picture

Ship has sailed.  They're going to fuck some people.

Wed, 10/28/2015 - 14:18 | 6722272 Seasmoke
Seasmoke's picture

Another 20 USD drop instantly. I'm no longer playing their games. Not paying bills. Fuck Em.

Wed, 10/28/2015 - 14:21 | 6722280 Dr. Engali
Dr. Engali's picture

I see silver and gold took their regularly scheduled plunge. So much for that surge.

Wed, 10/28/2015 - 14:25 | 6722322 silverer
silverer's picture

Absolutely positively can't let PM's go up.  That puts an immediate stick in the spokes of the Ponzi.

Wed, 10/28/2015 - 14:35 | 6722387 Crocodile
Crocodile's picture

Buy the dip and add some lead.

Wed, 10/28/2015 - 15:03 | 6722289 khakuda
khakuda's picture

Hahahaha.

As they measure it, unemployment is near 5% and core CPI, the number they used to use until 2012 is at 1.9%.  Both measures are back to where they want them, yet they sit at zero.  What a joke.

25 basis points IS zero and they can't even do that.

Wed, 10/28/2015 - 15:48 | 6722844 cougar_w
cougar_w's picture

It's all about the direction not the amount.

Wed, 10/28/2015 - 14:24 | 6722314 silverer
silverer's picture

Mom, are we there yet?  Are we there yet?

Wed, 10/28/2015 - 14:28 | 6722341 Raymond_K._Hessel
Raymond_K._Hessel's picture

I have an idea - let's take back from the Fed the issuing power, and have the public currency be issued by the government as debt-free legal tender upon issuance.

How about that?

Wed, 10/28/2015 - 14:39 | 6722410 1stepcloser
1stepcloser's picture

I see you're looking to get a bullet in the head

Wed, 10/28/2015 - 15:49 | 6722853 cougar_w
cougar_w's picture

"take back from the Fed"

Nopenope

Wed, 10/28/2015 - 14:33 | 6722381 Crocodile
Crocodile's picture

How many times do we need to say; they cannot raise rates, they cannot raise rates, they cannot raise rates, they cannot raise rates, they cannot raise rates, they cannot raise rates, they cannot raise rates, they cannot raise rates, they cannot raise rates, they cannot raise rates, they cannot raise rates until Gartman say they defitinitely will not, then they raise it by 15 bp's.

 

They have completely lost control except in the rigging game; if you look at the markets based on volumes, the downside has been trying for weeks now, but the PPT is there to keep this thing sideways.  They were on the sidlines waiting today.

Wed, 10/28/2015 - 15:43 | 6722817 Not if_ But When
Not if_ But When's picture

Thanks for reminding me how well my newly launched namtraG FUND (now closed to the public due to excessive demand) is doing.

Wed, 10/28/2015 - 14:43 | 6722428 Puchica
Puchica's picture

Makes me glad that Yellen continues to think about the children.

Wed, 10/28/2015 - 14:52 | 6722494 venturen
venturen's picture

wonder what they are going to do when gold, copper, oil, steel, wheat, corn, etc are $1 a ton and interest has been zero fro 50 years? And Warren Buffet owns everything and is 150 years old?

Wed, 10/28/2015 - 14:55 | 6722525 RopeADope
RopeADope's picture

Send everyone to Afghanistan.

Wed, 10/28/2015 - 15:01 | 6722557 Crocodile
Crocodile's picture

Can't be there, the people would mess up their poppy fields.  Maybe the land down under.

Wed, 10/28/2015 - 15:00 | 6722556 Sparehead
Sparehead's picture

I'll take a ton of gold for a dollar. Heck, I'll take 5.

Wed, 10/28/2015 - 15:01 | 6722564 SheepDog-One
SheepDog-One's picture

So now we're gauging 'door opening' ratios from the Fed....is it half open? Or half closed? Is it opening more slowly or closing faster? For fucks sakes.....rates NEVER going up in any of our lifetimes!!

Wed, 10/28/2015 - 15:02 | 6722567 Crocodile
Crocodile's picture

Friday will be a profit taking day.

Wed, 10/28/2015 - 15:05 | 6722586 yogibear
yogibear's picture

Fed is stuck in the corner with no out.

Wed, 10/28/2015 - 15:18 | 6722673 Last of the Mid...
Last of the Middle Class's picture

yeah they're gonna fuck some people, 250,000 americans. No shit

Wed, 10/28/2015 - 15:19 | 6722677 Last of the Mid...
Last of the Middle Class's picture

250,000,000

Wed, 10/28/2015 - 15:27 | 6722731 CHoward
CHoward's picture

The Fed just needs to shut the fuck up.  Every time they make a statement, they sound even more incompetent.  The Fed is pathetic and actually embarrassing itself, but I wouldn't expect them to understand or see it.

Wed, 10/28/2015 - 15:50 | 6722860 cougar_w
cougar_w's picture

You are really confused if you believe all that.

Wed, 10/28/2015 - 16:53 | 6723261 JohnGaltsChild
JohnGaltsChild's picture

Gold and Silver slammed.............mission accomplished.

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