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Stocks, Bonds, Commodities Tumble After Yellen's Hawkish December Hike Comments
Janet Yellen, testifying on The Hill, just dropped the largest hint that December is "on like donkey kong" no matter what. When askd if missed inflation mandates would hold her back from liftoff, she explaiend...
- *YELLEN SAYS SHE SEES U.S. ECONOMY AS PERFORMING WELL
- *YELLEN SAYS SHE SEES LABOR SLACK DIMINISHED SIGNIFICANTLY
- *YELLEN SAYS FOMC THOUGHT IT COULD BE APPROPRIATE TO MOVE IN DEC
- *YELLEN SAYS NO DECISION MADE ON DEC. MOVE, DATA TO BE MONITORED
- *YELLEN SAYS DEC. WOULD BE `LIVE' MEETING IF DATA SUPPORTS MOVE
- *YELLEN: FED EXPECTS ECONOMY TO JUSTIFY GRADUAL TIGHTENING PACE
Which roughly translated means - we are raising rates in Decmber no matter what happens!!!!
And stocks, bonds, and commodities tumbled.
Short-end of the yield curve is underperforming the long-end, stocks gave back most of their openig ramp gains, and crude contionued to slide.
Click image for huge legible version...
The USD surged...
2Y Yields are at their highest since 2011...
And December rate hike odds just hit 58% (up from 52% this morning)...
But last week a hawkish Fed was bullish??
Algos suddenly confused: Is a rate hike bullish or bearish now?
— zerohedge (@zerohedge) November 4, 2015
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Yellen just needs to shut the fug up.....
Headline on my DOW news feed:
*Yellen: Income is Going Up, Employment Is Going Up, Households Are In Better Shape
She is truly dilusional. I don't think Joe Sixpak would agree....
Joe 6pack will either be a slave or just die, so it doesn't matter to her
The Fed (Yellen) is desperate.
Think of the money some made today knowing what she was going to say? That is the scam they have played for years.
Heh, I hope they do raise rates. Just to watch the Fed try to catch falling knives, as the whole thing starts to unravel.
The funniest line was by far from mr SHERMAN.
god doesn't like to grow anything in the fall (things fall) or the winter, but rather in the spring. so he suggests GOD wants the Fed to raise rates in MAY.
ARE YOU FUCKING KIDDING ME!
THESE ARE THE CLOWNS ON THIS COMMITEE?
There must be an EBT increase, in the pipeline, for her income statement.
Queue Jamie, Lloyd and the rest of the Fed-trained financial terrorists. Pathetic.
Only in this fucked up world can you have a new spending bill worth trillions pass, and then pm's go down.
PMs did not go down, pet rocks do not move. The number of dollars needed to buy them went down because those dollars' value compared to the other shit currencies around the world went up.
Please spare us.
Time to load up the shorts for the next SQUEEZE which should coincide with the immense rally at the fed's decision NOT to raise in December
In other words, the beatings must continue until morale improves. Fuck you bitch.
Fucking Grinch bitch. She better make an extra batch of cookies for fucking up everybody's Christmas by destroying the Santa rally. Now how are we going to get trickled on if the bankers don't get their bonus?
TSLA up 10% today.
talk the talk and walk the walk. she'll never do it.
Lets see interest rates at 4% then if things are so good.
https://www.youtube.com/watch?v=G5TCx-wBux0
DavidC
Head Fake. I am sure there will be some excuse in December not to raise rates. Jawboning and crying wolf is starting to wear thin. They will never raise rates
Very possible, will be easy for FOMC to cherry-pick some data point and send Wall Street a Christmas/Hanukkah present.
Really getting tired of bullshit headlines like this at ZH. Makes a mockery of this site.
Fact: The last time the FED raised rates was June 2006.
it is never going to happen at least not for another 5-10 years if even then
just a big game when they come out and talk about raising rates
..... and once again they predict December without disclosing the year
And now the market will shit itself for a week or two, stocks will drop, and the hand-wringing starts anew about "not a good time to raise". Then Yellen says no rate raise, stocks soar, lather, rinse, vomit.
I don't think it's their turn to jawbone yet. The EU just did it. So, i think the next one is ABE-nomics turn. THEN, it will be time to "Roll out the Bulltard!". Sometime around Christmas, assuming sales suck.
"Assuming sales suck." good one - of course they will
But what about needing to raise rates to f over The Donald if he should win? My tea leaf reader has informed me that things change sometimes, such as if my aunt had balls she would have been my uncle. If I was an intelligent person I would spend my days watching Mr. Yellen to know what is going to happen in its casino, being dumb and lazy I buy real stuff, spend less than I earn, and fish a lot. Maybe I should apply for high level tribal status so a little birdie can tell me when to bet.
So they get to knock Gold down $100 in 30 days , they won't raise rates in December and Gold will go up $20 ..... HAPPY HANUKKAH !!
You can't threaten me with rate hikes. I know you're bluffing. You're fucked 6 ways from sunday if you raise rates. Take your empty threats and stuff em.
In the meantime, I'll use the time to compile as much cash as possible, before the collapse.
Oh, yeah. And screw you, you financial terrorist, traitor, scumbag.
Agreed with the financial terrorist, traitor (to justice), scumbag part, of course.
But as far as bluffing goes, not so fast. One very possible scenario is a 25bp rate hike in Dec. followed by another, maybe even another. Small enough potatoes that the Fortune 500 debt and government debt can temporarily afford it. Fed credibility restored. Now wait a cycle.
Then, a "data-driven" reversal and big dose of QE4 and more extreme measures.
This path rubs all the right spots for the Fed. It closes the loop on the credibility issue now in play after several years of promising rate hikes. It also allows another year for economic data to worsen a lot further before printing the ton of money that will be required to move the needle anymore and license needed to take more drastic actions like NIRP or overt equity buying.
If you were Yellen, trying to come out of this smelling like roses, what would you do? It's the smart play.
If they ever do raise rates that will tell you that they are prepared to collapse this pig, especially since every other central bank in the world is cutting rates as fast as they can.
This is exactly what I dont understand.....everyone else is in a race to the bottom ??????
"Algos suddenly confused: Is a rate hike bullish or bearish now?" LOL, so funny!
Come Dec. Jackass Yellen will need moar Data, as we all know he is data dependent.
Or is he depends dependent.
He is one ugly lady!
Liftoff and Recovery Road are back!
Does this make any sense that people should buy dollars if it is expected that FED would hike interest rate? Whats the connection between dollar value and interest rate? The interest rate was lowered years back to increase money supply and improve the economy by bringing inflation. But inflation still not there than why would FED hike interest rate? Why doesn't America make it compulsory that each married couple should at least give birth to 3 children? As the young generation would increase they will spend more and work more to improve economy and FED's goal to get rid of deflation would be achieved. By printing money purchasing power of dollar will be reduced, which means you would need more paper money to buy same product. This is not real inflation. Real inflation is when more people are willing to buy while the supply is too less.
Real inflation is present in many things, food, tuition and healthcare to name but three. Velocity of money has collapsed. ZIRP and QE have destroyed the old markers we used to use to draw rational and logical conclusions on these issues.
I see no real workable solution without severe financial pain.
Why doesn't America make it compulsory that each married couple should at least give birth to 3 children?
The current immigration policy achieves the same affect.
Prick that bubble...
Yeah 'could' be December chaps... but it's more likely I'm just talking shit up again.
Yep....jawboning about raising rates and then never doing it! EVER!
I should put all my Xmas savings into betting 'No rate rise in December'.
"Stocks, Bonds, Commodities Tumble After Yellen's Hawkish December Hike Comments"
translates to: "the fed will just double up on stock propping and pm dumping"
Trapped like the rats they are and being laughed at, The Fed announced today that it will most likely, maybe, definitely, probably raise rates in December for sure. Ms. Yellen said that she will definitely preside over a FOMC meeting in December and that meeting will of monumental importance unless it isn't.
This is a buying opportunity. She can't raise rates. its a bluff. When the market figures this out, stocks will move up.
The irony is that people think higher rates would be deflationary. Not true, except for the financial markets. Anecdotally, normalized rates would restore the income I lost to zirp 7 years ago, which was a multiple of my Social Security income. I am quite sure I am not alone, too.
Check out the periods/places when/where high inflation was/is extant. Note that high inflation is accompanied by high interest rates not zero interest rates. Interest rates generate income and that income must be monetized. Absent income, people use debt as a substitute. Debt induces deflation. Income fuels inflation.
Do not be fooled by market reactions to rate inflections. The short term and the long term effects of a rate regime are polar opposites. Mainstream economists seem to know nothing about this subject and their policy prescriptions are wrong.
Fed rate hikes will not cause growth to increase. beyond any pickup in consumer spending you have to look at Corporate carnage as all the debt they issued to fund buybacks looms larger. Risk assets correct downwards.
Normalization of Fed Funds will begin the process of correcting for decades of debt accumulation. Which is Deflationary, all else equal.
Except all else is not equal, and if risk assets head south too quickly Yellen will attempt to 1) talk back market with hints of -25bp, QE4, or both. If that proves too little expect to see the hike taken back, QE4 (Corporate etf?).
Eventually end game is Helicopter money. THAT will be inflationary.
No one has a crystal ball...Show me a country where interest rates are zero and inflation is high or a country where rates are high and inflation is low. I know the conventional theories quite well but I also know that they're wrong. Lose your preconceptions and simply try to account for the simple correlation I just mentioned. Look at the data and try to explain it...bet you cannot do it without introducing extraneous variables.
Eiii.. Yellen!! Those QE drank bumps, err.. traders, wants more monopoly doooossshhhh to play in casinos!!
You hear them, yellen!?
Knee jerk reaction, the market will probably close up today as any potential rate hike is priced in and a positive sign for the stock market. Let's continue this Santa rally!
Come on, the Fed members are not complete idiots. They know the pitchforks are accummulating as they keep rates at 0. Their survival instinct will force them to raise rates.
Downside, 2 month-long, coil-breakout-reversals in Ag, Au, SLV, GLD, HUI, XAU and others tell me we may soon be looking at $14 or maybe even $13 silver: stacking cash to buy more phyzz later may still be working:
http://finviz.com/futures_charts.ashx?t=SI&p=d1
Yeah. Stocks "tumble." If 30 basis points constitutes a tumble, then yes.