Following yesterday's FOMC minutes we suggested that the minutes are, all facts considered, extremely stale, especially when one actually observes the surge in all economic indicators (or should we say seasonal adjustments) since the last FOMC meeting. Moments ago, on CNBC, non-voting St Louis Fed president confirmed just that.
- St. Louis Fed President Bullard says FOMC minutes “are a bit stale”.
- Says some data stronger since FOMC minutes
- Doesn’t know where FOMC will come out on easing
- Says “different constellation” of data vs 2011
- Says “not sure” data warrant big FOMC action
- Says U.S. unemployment “very high”
- Says “we’re not going to react” directly to stock market
In other words, the FOMC minutes do not reflect the economy, but the Fed does not care about the market which just happens to be at 2012 highs, as it does not reflect the economy either, but instead reflects merely what the FOMC thinks, which in turn reacts solely to the market.
Bullard also says, via BBG:
- Possible QE3 could complicate exit strategy
- "Very worried’’ about European “common market” idea
- Only so much that ECB can do
- Quantitative easing may be warranted in Europe
- Earlier: Bullard Sees 80% Chance Congress Will Reach Financing Deal
Sure it will: if the market collapses and lobbyists and backers demand immediate action. There will be NO deal if the S&P continues to be at 2012 highs.