Inflation Expectations Collapse Post-Rate-Hike, Near Record Lows
Since The Fed hiked rates in December, the market's inflation expectations have collapsed in yet another clear indication of "policy error." 5Y5Y Forward inflation swaps have crashed below 2.00% for only the 3rd time in history (Lehman 2008 and September's Fed Fold were the other two) as despite central banker promises of transitory low-flation, the money is being bet against them as the regime-shift from full-faith to no-faith in Fed support continues.
But a rate-hike was supposed to stimulate inflation?
This is near record low levels for forward inflation
(3 votes)
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It's like 1 million Keynesians screamed out at once, and were silenced.
Means that long bonds are Cheap with a positive coupon .... negative rates will propagate across the world similar to illegal immigrants, for it is the will of TPTB
Can't wait. They will start giving away groceries before long.
/s
A small head of cauliflower in BC, Canada is now close to $10 bucks.
No inflation? About time to eat the big screens and Ipads.
I don't know if this is a one off but my grocery store (hannafords) raised the price of chicken breasts from $1.99/lb to $2.90/lb 3 weeks ago. Pretty big jump, don't see that in everything but that stood out for me.
And when we all accept them, we have reached our end. (got the /s)
I still wont beleive we are in a correction until housing prices drop big time and unemployment shoots higher. Until then its all TRANSITORY!!
I thought higher rates killz inflation, a la Volker's early 80's.
Rates were raised to maintain cred, nothing more.
They should only be raised to defend the dollar, which is currently the only smiling horse at the glue shop.
I'll have to take issue with this.
In other news, GE headquarters abandons Connecticut for Taxachusetts
https://www.bostonglobe.com/business/2016/01/13/general-electric-will-announce-tomorrow-that-has-selected-boston-for-global-headquarters-according-official-familiar-with-process/ZYZSu7GorfVTRXM2ZIaabJ/story.html
If you ever go back into Wooly Swamp son you better not go at night
There's things out there in the middle of them woods
That'd make a strong man die from fright
There's things that crawl and things that fly
And things that creep around on the ground
And they say the ghost of Irving Fisher gets up and it walks around...
Well the eagle's been flyin' slow
And the flag's been flyin' low
And a lot of people sayin' that America's fixin' to fall
Well speakin' just for me
And some people from Tennessee
We've got a thing or two to tell you all
This lady may have stumbled
But she ain't never fell
And if the Russians don't believe that
They can all go straight to hell
We're gonna put her feet back
On the path of righteousness and then
God bless America again
Ummm...whatever.
The source of the problem would appear to be a little closer to Tennesse than Moscow..
Bernanke lived in the eccles building way back in the gurgling woods
And he never did do a lot of harm in the world
But he never did do no good
People didn't think too much of him
They all thought he acted funny
The old man didn't care about people anyway
All he cared about was his money
He'd stuff it all down in Mason jars and bury it all around
But on certain nights if the moon was right
He'd dig it up out of the ground
He'd pour it all out on the floor of his shack
And run his fingers through it
Ben Bernanke was a greedy old man
And that's all there ever was to it
I feel a tragic like I'm Marlon Brando
When I look at my China Girl
And I could pretend that nothing really meant too much
When I look at my China Girl
I stumble into town, just like a sacred cow
Visions of swastikas in my head
Plans for everyone
It's in the whites of my eyes
My little China Girl you shouldn't mess with me
I'll ruin everything you are
Y'know, I'll give you television I'll give you eyes of blue
I'll give you a man who wants to rule the world
Jeffrey Immelt - China Girl
......as performed by David Bowie
Why is it when people quote snippets of 'China girl', they always leave out the best line...?
'Oh baby just Shut your Mouth...'
One of the best songs ever written. It's about Amerika, fascism, heroin and being bitten by the Yellow Fever ;) Iggy Pop of all people wrote it.
Another complex song in the index - The Man Who Sold the World.
The Fed was desperate; backed into a corner. Been down to child's play for a while now....they think if they can say it's so, they can make it so. That's clearly no longer happening.
The fact that the fed is raising rates when every other market signal is screaming deflation and all the other central bank of the world are cutting tells me they want this fucker to collapse. There's no other excuse for it.
Worked in '38.
Can anyone point to where that rate rise has manifested itself? The 10 year is still 2.15 or so. Just wondering if this is another one of those headfakes where they don't actually do what they say they are doing?
Try the 30yr mortgage rate posted at 3.86......this gave the banks an excuse to rape and pillage.
Delfation is a Keynesian cum shot.....Other than big screen TVs, NOTHING Is coming down. Alot of things SHOULD be comming down but due to Crony Capitalism the fix is in. Gas in PA is $2.17 a gallon at $32 a barrel oil what should it be? Buy an airline ticket, those havent come down a cent. Still paying Freight fuel surcharges.... yep me too. What you have is big business in collusion with the government and the fix is in. Call it facism or corporatism.
At some point in the not too distance future the folks on mainstreet arent going to be able to afford food, which is SKYROCKETING. That day is a fuck load closer than anyone thinks.
By raising rates a quarter the banks make a shitload more on loans and credit cards, while still borrowing at zero, as that wasnt a quarter percent interest kick that they passed on.
But how can that be with all the jobs that are being created.
To create inflation, do QE4 for the people. $10,000 - $100,000 should do it.
At the lake....."QE 4 For the people......."
$100,000?????
divided by 320 million people?????
/scargasm
10k is 3.2T..... far less than they gave to wallstreet.
chopper dollars from the sky
a thousand silver dollars high
pm's in the am
a silver lining nigh
"Inflation will return, and the Fed will speed up rate hikes, top forecaster says" (MarketWatch)
http://www.marketwatch.com/story/inflation-will-return-and-the-fed-will-...
Confused yet?
DEFLATION STARTED! http://forum.prisonplanet.com/index.php?topic=80429.msg1583434#msg1583434
Even the most ardent ZH'er surely does not believe that the FED thought the rate hike would increase inflation. Let's get real. To increase rates, Liquidity has to be pulled from the market (before some of you start chanting Rewerse Repos - remember that they pull liquidity out of the market because the banks are required to buy back T-bills and whatever crap they 'sold' temporarily to the FED). If the amount of money in circulation drops, you cannot have inflation unless the production of the country drops faster.
This is the FED trying to jawbone the markets into letting it reload the gun so that they (the FED) can cut rates when the bad economic news we all know is out there (except the MSM - "who could have seen this coming") comes crashing on the collective consciousness of the unwashed masses.
All well & good, but 'cutting' rates (their actual rate rising hasn't even gotten off the launch pad), will give about a (2) week respite of 'positive sentiment' before the deflationary virus takes hold again, stronger than ever.
Quick another rate hike!
Mathew 7:16
the fed hiked rates due to the political theater so the muslim could claim.....
see... my policies are working and the economy is so strong...the fed HAD to raise rates....
-LOL oops... market disagrees.... and btw... never mind those 93 million plus, who....
"quit looking for jobs" ya sure 5% unemployment... (NOT)
fucking eko-no-mists, the modern day vodoo priests to cover up the evil from the [political] sacerdots
I dont know about expecting, but after comming back from Costco over lunch I can tell you inflation is very very much alive and well.