"Very Worrisome Signal For Fed Credibility" - Former Fed President Trolls Federal Reserve
It's one thing for a fringe website to mock the Fed (on a daily basis, for the past 7 years), with articles such as this one we posted just before noon today, showing that inflation expectations have once again imploded, less than a month after the Fed's rate hike was supposed to signal confidence in the economy and a renormalization in inflation:
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.
However, when a former Fed president, one who was employed as recently as two weeks ago by the Minneapolis Fed, Narayana Kocherlakota, best known for being the biggest hawk to dove conversion in Fed history, and also being the one person to dare put a negative dot on the Fed's ever amusing dot plot, suggesting it is time for negative rates does exactly the same, you know that the Fed's credibility has already run out.
From Kocherlakota: "Very worrisome signal for Fed credibility as 5 yr 5 yr forward breakevens plumb new lows ..."
Very worrisome signal for Fed credibility as 5 yr 5 yr forward breakevens plumb new lows ... pic.twitter.com/OxavyW2cTD
— NRKocherlakota (@kocherlakota009) January 13, 2016
Of course, the far more worrisome signal for Fed credibility is not that inflation forwards are plunging, but that one of the Fed's faithful has now taken to a public forum like Twitter to troll his former co-workers.
All that it would take now is for Yellen to formally admit the Fed's credibility is gone and to cut rates first back to zero, and then negative, with a solid dose of QE on top, admitting it was always only about the markets.
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http://biblicisminstitute.wordpress.com/2014/08/24/the-corrupt-federal-r...
Newsflash...they are going to continue hiking rates. How else are they going to be able to "stimulate" the economiclit of the USA when the SHTF.
News flash: Shit already hit the fan.
In reality the Fed shouldn't care about the stock market.
All they SHOULD care about is wage inflation v's consumer goods inflation.
The stock market is far FAR FAAAAR too agile to be micro managed by a bunch of academics meeting once a month.
Newsflash - What rate hike?
Is this douchebag working for a fucking Wall Street bank now? Begging for more free money for the bosses?
He thinks it had more credibility when he was there?
He joined academia, he is definitely groveling though. Not sure whom for in specific, but wall street for sure.
http://blogs.wsj.com/economics/2015/06/08/minneapolis-feds-kocherlakota-...
Algorithm time-resolution = Trades in microseconds.
Fed time-resolution = Once a month
The Fed responds in a time-scale that is 11 orders of magnitude slower than the market.
Your point is well made.
I must disagree.
The FED has the Overnight Window, the Repo and Swaps desks...
The FED has the FEDWIRE.
The FED can see transaction flow in real time on a scale that not even the very largest Commercial Banks can pretend to rival.
Debits, CCard transactions, electronic checks, auto-payments, etc. etc...
...& The FED either collaborates to engineer or directly controls that 3:30pm ramp everyone loves to take rides on.
And when it all collapses, he and his family will be hiding in the bunkers we provided with our taxes and we will be treated to this......
http://beforeitsnews.com/global-unrest/2016/01/the-lion-is-it-time-to-fi...
With a name like Cock-her-lickoda, how can you take him serious outside of a porn film?
He might actually be right in his prediction on the dot plot and we go negative Q1.
Kocherlakota: "This changes everything we thought we knew about economics!"
Fucking Keynesian dumbasses.
He doesn't even compute that such a statement itself damages/destroys the credibility of economists and economics.
It would appear that the lot know nothing and are merely repeating the same rote pablum regurgitated at their alma maters..
The Fed - Just hang the fucking criminal bastards already, I'm tired of even hearing the word Fed at this point...
Well that would require "a law" to be passed (or a revolution) and I don't think there's any politician out there thats ever going to advocate "that law" cuz, ya know...funding & elections & promising Faaarrreee! shit for the vote.
Sooo...;-)
Unfortunately Nmewn you are correct. Our corrupt politicians don't even have the guts to audit the Fed, much less hang the Fed Governors from trees like piñatas.
It will definitely take armed citizens to revolt and put an end to their criminal rule over the US. I personally volunteer to hang the first one...
I'll bring the rope.
I'll bring the tree!
Another idea. Let's push 'em out of airplanes with parachutes on and then let the patriots on the ground do some target practice.
I'll be smiling for days thinking of that...thank you.
The Creature from Jekyll Island commonly known as "The Federal Reserve" has no credibility except as a tool for warmongering and vampiric slavery...
Well, that and the "full faith" that Uncle Scam keeps them in business.
Uncle Sam and the "Federal Reserve" that enables all his depravities are as unholy a symbiosis as this world has ever seen.
I've been advocating hangings for 20 years. Glad to see you realize the only way to rid ourselves of this lying thieving vermin is to fucking kill them
I've had the Bernanke guillotine avatar for 7 years.
Doves are flying?
"Doves are flying?"
Yup, lust like in Mars Attacks!
Creepy Dude
Even Powell and Fischer would agree.
They always tell the truth AFTER they've fleeced us with lies. Hang this guy anyway. Is there anything this prick could tell us that we don't already know? No. He's just a piece of shit. Even if he did know something we didn't I'd rather get the satisfaction of hanging his ass than hear what he says anyway.
Former Fed trolls Fed. Seeing a lot of that lately.
helicopter money is the only thing that can save the fed.
Glad to see he's worried about the Fed's reputation and not trivial things like...oh I don't know...another financial crisis or the condemnation of still more working-class white Americans to permanent poverty at the fringes of the formal economy.
Cutting rates and the associated buybacks and other financial engineering won't help equities this time. You need a break of at least a couple years to sucker new dummies into the market. After this next crash, everyone will know better than to fall for that dumb trick again.
Fed Credibility???
That is an oxymoron! They haven't had any "credibility" since Paul Volcker ran the show! It's been a bubble factory since Greenspan started "moral hazzard" (before it was in the vernacular) - all the way back in October 1987!
BRING THIS CRIMINAL ON RICO VIOLATIONS, MARKET MANIPULATION, put these criminal Fed Governors in PRISON !
Federal Reserve credibility?
Aren't hose terms mutually exclusive, like Military Intelligence, Healthy Cigarettes, and Government Assistance?
OK, maybe it's just an oxymoron like NMB (above) stated.
Credibility? Uh, let's see. Fed changes inflation benchmarks as it sees fit. Fed spends past 25 years pumping too much money into the system, leaving rates too low and bailing out every single even minor cock up in an asymetric policy which caused:
1. Three extraordinarily huge asset market bubbles, 2 of which have had devastating crashes causing economic hardship so far with a 3rd nearing.
2. Prevented the clearing of markets of bad debt and excess capacity which has led to a more fragile, indebted sytem which never gets to benefit from capitalism's harsh, but effective redirection of assets to more efficient uses.
Kocherlakota man, you are the problem. Serial bubble making and fostering capital misallocation is so obviously not the path to the best use of resources and maximum economic growth. The guy should not be teaching students even at a mediocre school.
Negative interest rates could cause the banking system to contract, slowing growth. As counterproductive as thinking that creating excess capacity with zero rates would be anything but deflationary. To argue that the outright stealing of hard earned money from the bank accounts of honest working people will help growth is idiotic and should be a criminal offense inasmuch as it advocates the violation of property rights, the foundation of the market system.
Negative interest rates by the end of the year.
Beggar thy neighbor, folks.
Haven't seen Janet Felons face this year?????
I have noticed they are trotting out new FRB spokespeople since the new year.
It is quite unsettling to see a Cleveland Federal Reserve official on Bloomberg on the San Francisco set being broken in on her first, ever, interview.
I see Stanley Fischer is giving speeches but, has vanished from public view.
I guess they bought Magic Stan on to "add" the most "value" for FRB shareholders as they coordinated the latest catastrophe?
BRING BACK THE NECKLACE!!!!
Unleash the Haitian TonTon Macoute with their tires and gasoline!
I suppose they are all in the Bronx now?
Close enough to 740 Park Avenue!
sarc/on
who would think ZERO INTEREST WOULD DESTROY THE ECONOMY...Oh wait...Isn't this what Japan has done for 30 years?
I am old enough to remember when the US said that Japan's problem would be resolved if Japanese banks just wrote down the bad loans on their books and got on with it. When the shit hit the fan in the US, we suspended mark to market accounting and the government bought the bad loans from the banks and moved them to the taxpayer's books. Then, we followed Japan into QE and ZIRP as you point out. All of which has been disastrous as it prevented the real healing by claiming that a free lunch paid for by the taxpayers who have little savings would resolve it all.
Why do you think this hurts the Fed reputation? By their actions it's easy to see that they want to crash the market. Many people have noticed that the Fed raised the rate but took no liquidity out of the economy. If the market has a 20-25% "correction" isn't that a way to squeeze liquidity out of the economy?
It is not about a company selling a good product that the public wants and needs at a fair price... it is about whether Janet will lower the interest rate to zero...and when we get there..why we will all be in zerohedge land...where you can hedge all your bets with zero percent interest..