Here It Comes: New York Fed President Says "If Economy Weakens Further, Would Consider Negative Rates"

Tyler Durden's picture


Remember when the Fed's dots - less than a month ago - suggested there would be 4 rate hikes in 2016? Ah, the memories. Well, you can not only forget that (now that the market is estimating the next rate hike will come in October if ever), but it appears that the Fed will follow Kocherlakota's advice after all and not only cut rates (the possibility of a January rate cut now is 10%), but will pass go, and collect negative rates:


After today's atrocious, recessionary data, one can be certain that the Fed is furiously considering negative rates.

While the comment came from the Dudley Q&A, his full speech can be found here.

And just to add confusion, here is a spurious Bloomberg headline which will hardly aid matters:


So both NIRP and more QE, just as anyone who is not a tenured economist or drama major predicted.

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Fri, 01/15/2016 - 10:46 | 7050214 NotApplicable
NotApplicable's picture

When in doubt, whip it out!

Fri, 01/15/2016 - 10:47 | 7050224 The Juggernaut
The Juggernaut's picture

This minimum wage hike discussion is simply jargon.  The minimum wage is enabling the Fed Reserve to continue to make the currency worthless.  The minimum wage hike is to prevent riots in the street and to hide the truth that someone (a small handful of people) controls everything!

Fri, 01/15/2016 - 10:52 | 7050260 philipat
philipat's picture

How can anyone take The Fed seriously now? Problem is that The Fed and the Cartel control about 70%+ of "Market" activity, so who is going to break ranks first??

Fri, 01/15/2016 - 11:50 | 7050422 Soul Glow
Soul Glow's picture

Is the Fed trying to keep altos from reading ZH today?

Fri, 01/15/2016 - 11:57 | 7050447 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

So we're all suppose to act surprised so the DOW can rally 1000?.

All hail the joo bankers for being so generous!

Fri, 01/15/2016 - 12:09 | 7050516 NoDebt
NoDebt's picture

And the market bounce from this incredibly bullish comment?  ZILCH.  I think jawboning is losing it's impact.

Fri, 01/15/2016 - 12:14 | 7050538 DownWithYogaPants
DownWithYogaPants's picture

I need Selma Hayak to jawbone me and provide lip service too!

Fri, 01/15/2016 - 12:18 | 7050572 Haus-Targaryen
Haus-Targaryen's picture

This shouldn't surprise anyone.  

Negative + QE and when a bank goes bust they'll do depositor confiscations. In this exact order.  

Fri, 01/15/2016 - 14:21 | 7051302 Anasteus
Anasteus's picture

Maybe not. QE would neutralize NIRP in that the interest the banks will have to pay on their excess reserves to CB will be positively balanced by yields earned in the casino unleashed by the fresh pile of new credit, much like it happened with ZIRP just with a bit shifted ratio. The QE+NIRP scenario is the same scam indistinguishable from the previous QE+ZIRP, best portrayed by equality 0 + 2 = -1 + 3.

The FED just hopes 'QE+ZIRP renamed to QE+NIRP' magic will work. That's all that is to it.

Fri, 01/15/2016 - 13:05 | 7050826 slimycorporated...
slimycorporatedickhead's picture

do you mean down with yoga pants or like... "down" with yoga pants? wheres all the rate hike dummies now? 4 rate hikes in 2016! "done deal" they were saying like 2 weeks ago, ya you experts really know what you're talking about

Fri, 01/15/2016 - 12:16 | 7050549 greenskeeper carl
greenskeeper carl's picture

Agreed. No more "open mouth" operations to save the day. Better fire up the printers. How does anyone listen to these people anymore. THis entire decline caught them completely flatfooted, as has every other one. WHat a bunch of morans

Fri, 01/15/2016 - 12:47 | 7050732 Uchtdorf
Uchtdorf's picture

Sorry, bud. They're not surprised, at all. They're doing this on purpose. This is how they force us into a global currency.

Fri, 01/15/2016 - 13:21 | 7050920 Shad_ow
Shad_ow's picture

Perhaps this is why they are allowing the market to fall. 

Fri, 01/15/2016 - 12:15 | 7050547 MalteseFalcon
MalteseFalcon's picture

FED needs to make up its mind; the stock market or the currency.  The FED has already cut bait on the real economy years ago.

Gold is gaining on every other currency in the world.  To forestall that happening to the dollar, the FED raised rates.

Can't have it both ways anymore.

Time to decide.

War only works if you win decisively.

Fri, 01/15/2016 - 13:28 | 7050981 Thought Processor
Thought Processor's picture



Nice summation of current events.  Well done.


Both succinct and accurate.



Fri, 01/15/2016 - 13:33 | 7051048 True Blue
True Blue's picture

Well, when someone is holding a gun to your head, it doesn't matter if he looks like Bozo the Clown or the personification of Hell itself -you take him 'seriously'.

In fact, you may take the crazy one a little more seriously.

Fri, 01/15/2016 - 10:52 | 7050261 Save_America1st
Save_America1st's picture

I think this is what they've wanted all along.  They can't continue to have the strongest currency even if it's still the reserve currency (or petro-dollar) for a what little time left there is for the dollar.  I think they want to roll out QEternity real bad, so they threw in a 25bps rate hike (pretty much means nothing), and now they're purposely bringing down the bubble as best they can in order to go neg rates and will print Trillions more.  This can only be good going forward for phyzz PM's.  Paper will crash sooner than later...and then phyzz will disappear. 

Bail-Ins next, bitchez.  Get your fiat out of the bankster system as best you possibly can and get outta the fucking way of what's to come, cuz it ain't gonna be fun for anyone...especially those who didn't head the warnings and didn't get to safety before the Tsunami hits. 


***Is ZeroHedge getting hit with DOS attacks this morning?  The site is pinging very slow and throwing out website maintenance errors.  Or is it just me noticing this???

Fri, 01/15/2016 - 10:56 | 7050272 Cangaroo.TNT
Cangaroo.TNT's picture

Protonmail, too.  Isn't ZH hosted in Switzerland, too?

Fri, 01/15/2016 - 10:59 | 7050321 PrezTrump
PrezTrump's picture

Def getting hit today...

I  think we have another bubble left before we go negative.

Fed 'credibility' is critical..  

Fri, 01/15/2016 - 11:58 | 7050462 Luc X. Ifer
Luc X. Ifer's picture

Fed 'credibility'?!  Same guys who trumpeted rate hike just few months ago now talk negative rates?! Isn't obvious they are not idiots but puppets singing and dancing how it is asked from them by their masters behind the curtain :) ?!

Fri, 01/15/2016 - 12:04 | 7050489 strangeglove
strangeglove's picture

We raise rates while we lower them. oh thoose negative rates are for us not you, See you in nantuket


Fri, 01/15/2016 - 12:13 | 7050531 The Saint
The Saint's picture

Exactly.  Ol' Yeller was talking about negative rates just days before raising fed funds.  Something odd is going on and it's not good for the average American.

Fri, 01/15/2016 - 11:53 | 7050435 giggler321
giggler321's picture

Don't they have to ban cash before they take it neg since there would be runs?  or just ajoined with capital controls

Fri, 01/15/2016 - 12:52 | 7050757 Uchtdorf
Uchtdorf's picture

"or just ajoined with capital controls"


If their maniacal options have anything to do with control, they will use them. Control is good, but only for them. Prepare accordingly.

Fri, 01/15/2016 - 11:04 | 7050381 PrezTrump
PrezTrump's picture

"minimum wage is enabling the Fed Reserve to continue to make the currency worthless"

if that was all they were doing we would all be much better off.

Fed makes currency worthless via inflation, then they need to raise wages to prevent starvation.  Not the other way around.

Fri, 01/15/2016 - 10:49 | 7050238 Cangaroo.TNT
Cangaroo.TNT's picture

Well, good thing it's only a hypothetical "if".

Fri, 01/15/2016 - 10:53 | 7050267 Hitlery_4_Dictator
Hitlery_4_Dictator's picture

Fuck you, eat a dick Dudley, we here at ZH called it all along. We were not fooled. Call us conspiracy theorists, i guess it's a conspiracy FACT now.  UNREAL.

Fri, 01/15/2016 - 10:59 | 7050314 flaminratzazz
flaminratzazz's picture

And the train wreck gains speed.

Fri, 01/15/2016 - 12:06 | 7050503 Bay of Pigs
Bay of Pigs's picture

Ask any American who the William Dudley is and well over 95% of them will give you a blank stare.

Fri, 01/15/2016 - 12:09 | 7050514 Hitlery_4_Dictator
Hitlery_4_Dictator's picture

Shit, they don't even know where Mt. Rushmore is or who the vice presdient is. 

Fri, 01/15/2016 - 12:03 | 7050488 glenlloyd
glenlloyd's picture

that would be tin-foil hat wearing conspiracy theorists if you please...

Fri, 01/15/2016 - 12:21 | 7050586 greenskeeper carl
greenskeeper carl's picture

No shit. If I wanted to merely be a "conspiracy theorist" I wouldn't be wearing this sweet hat, and I don't want that overlooked.

Fri, 01/15/2016 - 12:12 | 7050532 WorkingClassMan
WorkingClassMan's picture

Dudley-Do-Wrong and the unFed are at the middle and working-class' throats like Bela Lugosi.

Fri, 01/15/2016 - 10:57 | 7050295 MrNosey
MrNosey's picture

There will be no real recovery what so ever!

The elite will soon run and hide in the bunkers paid for with citizens taxes, after engineering a full economic collapse as well as starting WW3, plus they will make sure that there are enough Jihadi's in the West to start a race war.

That should be enough to cover up the failed fiat ponzi scheme and take care of the 'excessive' population......

Fri, 01/15/2016 - 10:59 | 7050306 MrNosey
MrNosey's picture

Deleted duplicate Post.

Fri, 01/15/2016 - 11:01 | 7050334 Squid Viscous
Squid Viscous's picture

Stick save, and a beauty by Dud-lard, but ...wait! there's a turnover in the neutral zone and the Palookaville Bears are charging back down the ice!

Fri, 01/15/2016 - 11:07 | 7050399 SteveNYC
SteveNYC's picture

Hey "DUD"ley, you start charging me to use your shitty insolvent banks, then it will be SteveNYC Bank of AMSEC from now on:



Fri, 01/15/2016 - 12:07 | 7050509 Wulfkind
Wulfkind's picture

Cue Mr. Yellen to whip out her boobs and show her NIRPles.


Fri, 01/15/2016 - 12:54 | 7050770 Uchtdorf
Uchtdorf's picture

How do I unread that?!

Fri, 01/15/2016 - 13:51 | 7051243 de Cosmos
de Cosmos's picture

Just think about Yellen in yoga pants.

Fri, 01/15/2016 - 15:22 | 7051928 Uchtdorf
Uchtdorf's picture

Hello, ZeroHedge. This is Mrs. Uchtdorf. My husband has been hospitalized with a massive stroke after reading the yoga pants comment above. The horror.

Fri, 01/15/2016 - 12:14 | 7050541 Perimetr
Perimetr's picture

And when negative rates don't work, then outlaw cash, gold, and proceed with the bail-ins, and then martial law.

Fri, 01/15/2016 - 13:04 | 7050819 Uchtdorf
Uchtdorf's picture

You're going to be one of the first to get chipped for sharing thoughts like that. It will only sting for a minute or two. 

Fri, 01/15/2016 - 12:49 | 7050740 American Psycho
American Psycho's picture

Fuel up the helicopters, time for some cash drops...GET TO THE CHOPPA

Fri, 01/15/2016 - 13:57 | 7051297 de Cosmos
de Cosmos's picture

Well, the FED could just Whip It...



Fri, 01/15/2016 - 10:49 | 7050217 Soul Glow
Soul Glow's picture

Everything is fine right now, but....if things get bad we're considering slaughtering a few unicorns to our god molec.

Fri, 01/15/2016 - 11:00 | 7050333 mandalou
mandalou's picture

come on man, do the cramer mix for this. We all love it.

Fri, 01/15/2016 - 10:47 | 7050219 ptolemy_newit
ptolemy_newit's picture

follow Ptolemy_newit, he seems yto be banned ot blocked


Fri, 01/15/2016 - 10:47 | 7050220 Budnacho
Budnacho's picture

3:30 Ramp?

Fri, 01/15/2016 - 10:53 | 7050268 PTR
PTR's picture

Maybe it'll be a diving board.  Time will tell.

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