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Fed's Dudley Admits Fed 'Liftoff' Is All About Inspiring Confidence (Not Data)
The Fed's Bill Dudley confirmed this morning why The Fed is so keen to raise rates no matter what - "liftoff will signal The Fed's confidence in the US economy." In other words, the 'con' continues... We have two simple questions - 1) Given the chart below, which 'economy' is The Fed confident in? and 2) What is The Fed going to say when they reverse the rate hike (as we have seen with every nation who has tried to raise rates since 2010)?
Which economy is Dudley 'confident' about?
Can The Fed do what everyone else has failed to do?
As a reminder, all these countries also wanted to "signal confidence" in the economy. They lasted on average a few months before they had to unsignal...
As we noted previously, the question then becomes: if the Fed does hike in December as over 90% of economists predict, will it be the first bank that avoids having to promptly "unhike", which is unlikely or far more realistically - how long until the Fed is forced to admit "policy defeat" and go right back to ZIRP, or perhaps even NIRP, ultimately sliding right into QE4.
Alas, by now the script of hiking just to have an alibi to ease has become so trite even Deutsche Bank recently had the temerity to ask "Is The Fed Preparing For A "Controlled Demolition" Of The Market"?
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They are going to raise rates. It's their only (slim) chance. Pump stocks to new highs by December, raise rates and pray to whichever demon is highest on their list of deities. That's all they have left.
REad
And the Fed goes Emo; all touchy, feely. Rational Logic be damned.
Mandates aside, the Fed must see something it doesn't like? If the economy is doing well seems confidence would take care of itself?
Yeah, they already look like fools, might as well look like idiots too. They should of started bumping rates instead of QE3, but that would of been inconvenient for their lords and masters......
Go ahead, make my day.
Can the Fed do it? Yes they can. I'm surprised by some of your articles on the Fed lately ZH. You used to get it. The Fed does not drive the economy, they drive the stock market and they have means other than interest rates to do that. They know that ZIRP will destroy the dollar eventually. There is no improvement in the economy as far as the eye can see. They can't wait much longer to do something so insignificant as a .25% increase. Keeping the game going is all they have.
They can't wait much longer to do something so insignificant as a .25% increase
They hint at a rate hike (or postponing one) and the "markets" move by a percent or two in a day. There is $19T and counting of outstanding, interest-paying debt. There are reflated housing bubbles all over the Syrian-refugee landscape known as Obamaland. Interest rates have been held at zero for forever.
And you think a .25% hike is insignificant?
You might could be on the wrong side of your "used to get it" quip.
What the FED needs is a domestic (US) exploding pineapple soda can. Then, they can use that as one more excuse to postpone raising rates until after next years election.
Ponzi schemes are all about inspiring confidence.
That's why they are called con-men.....
+10000000000000 Nail Head Hit
Inspire
Bubble
Bubble Burst
Steal
Repeat
The biggest finacial swindle in history. It's all a con folks and the sad thing is they know it.
Its going to be the greatest transfer of wealth to the upper .01% the world has ever seen. The ones holding the bag wont have many choices...join/live in the ghettos or off themselves. Those that have gotten out and have hedged accordingly will at least have food and shelter.
As the father placed his four year old son on top of the fireplace mantle, and beckoned him to jump, the child was obviously fearful. The father continued to tell his son all will be well, don't worry, I'll catch you. After much exchange, the child finally worked up the courage and made his move. The father stepped back and the child crashed to the floor, catching his breath, the youngster started to cry, his face red, the tears streaming. The father said: Son, let that be a lesson to you. Never trust anybody when you have choice, not even your own father.
Ok Janet, we're with you!
Great ! This same sort of thinking plunged Japan into 7 recessions over the past 2 decades.
FOARWARD !!
Yellen has already talked this economy into a double depression with constant tightening threats. The Fed and the government absolutely have the power to affect the economy, especially negatively. What she is doing is no different than threatening to nuke New York every time she gives a speech. Do people need that to actually happen before they close up shop and leave? Everyone knows the Fed can deliver a financial nuke.
But, But, We got Mr. Algo! What could go wrong? USA#1...USA#1...All together now! Are you believing yet?
I am we todd it. sofa king we todd it. i am FED.
master of puppets
https://www.youtube.com/watch?v=kV-2Q8QtCY4
August 24, 2015 it became clearly obvious to me the Federal Reserve buys stocks.!!
Who else is powerful enough to reverse a -1000 point drop??
you're obviously young...which is good. bless you. the same obvious work happened in the dot com bust, and in pre 9-11 crash, and in post 9-11 crashes.
2 things I now know for certain:
1) We are FUCKED!
2) Most people are total fucking idiots!
That is all...
I never knew that. Fucking A
Stupid article. How about an article about the FED benefiting the 1%. So 6 years of ZIRP has not led to a strong economy. The FED has been wrong and now we have to read crap like this. 0.25% ....BFD....how about raising rates 1%?
This is great news. It proves that they know what they're doing and everything will be so wonderful. I also predict that Rainbow Unicorns will be seen everywhere and everyone will be singing in the streets and dancing. It's nirvana brought to us by the fed. What would we do with out them?
Sacramento was just a test.
The Fed's Bill Dudley confirmed this morning why The Fed is so keen to raise rates no matter what - "liftoff will signal The Fed's confidence in the US economy."
Gaming doesn't inspire confidence.
Fed will raise rates with the right hand and monetise govt & banker debts with the left.
FED: "Look at my Right Hand!!! Feel my CONfidence????"