Fed Minutes: "Few Fed Members Said More Stimulus Would Be Needed"

Tyler Durden's picture




 

Just because Bernanke did not explain everything in the post-FOMC conference, here is more:

  • A FEW FOMC MEMBERS SAID MORE STIMULUS WOULD PROBABLY BE NEEDED
  • SEVERAL ON FOMC SAID FED SHOULD STUDY `NEW TOOLS' FOR EASING - C5 Galaxy??
  • FOMC PARTICIPANTS SAW MODERATE GROWTH LIKELY IN COMING QUARTERS
  • FOMC AGREED `IT WAS PREPARED' FOR FURTHER ACTION AS APPROPRIATE
  • FOMC SAW `UNUSUALLY HIGH' UNCERTAINTY FOR JOBLESS, GROWTH
  • SEVERAL OTHER FOMC MEMBERS SAW ACTION NEED IF ECONOMY WORSENS

Well, more stimulus was needed, and we got it in the form of Operation Twist 2. Nothing new, but algos need their flashing read headlines.

Here is what is spooking risk:

a few saw inflation risks as tilted to the upside; they generally were skeptical of models that rely on economic slack to forecast inflation and were concerned that maintaining the current highly accommodative stance of monetary policy over the medium run risked eroding the  stability of inflation expectations, with a couple noting that large long-run fiscal imbalances also posed a risk.

and this on Treasury market dysfunction:

Some members noted the risk that continued purchases of longer-term Treasury securities could, at some point, lead to deterioration in the functioning of the Treasury securities market that could undermine the intended effects of the policy.

and On China:

The main factors cited as underlying the elevated uncertainty about economic outcomes were the ongoing fiscal and financial situation in Europe, the outlook for fiscal policy in the United States, and a general slowdown in global economic growth, including the possibility of a significant slowdown in China.

Which caused this reaction in markets:

 

Full minutes wordcloud:

 

And here is the full thing:

 

FOMC Minutes June

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Wed, 07/11/2012 - 14:04 | 2606818 Hype Alert
Hype Alert's picture

Oh Snap!  "A FEW?"

Wed, 07/11/2012 - 14:10 | 2606842 Rusticus
Rusticus's picture

Ben, that clicking sound that's replaced the bang  means you're out of bullets.

Wed, 07/11/2012 - 14:11 | 2606849 LuKOsro
LuKOsro's picture

GOLD uncertain, S&P going down, EUR/USD down, USD/JPY up until next US elections.

Wed, 07/11/2012 - 14:13 | 2606866 King_of_simpletons
King_of_simpletons's picture

Never really understood the reason to have FOMC meetings and the subsequent suspense. Bullshit upon Bullshit and more Bullshit and yet more Bullshit.

Wed, 07/11/2012 - 14:25 | 2606907 TruthInSunshine
TruthInSunshine's picture

C5 Galaxy?

 

  • SEVERAL ON FOMC SAID FED SHOULD STUDY `NEW TOOLS' FOR EASING - C5 Galaxy??

It is my duty to inform that if they're wanting to do some serious lifting, they're going to need some bigger planes. 

http://blog.kievukraine.info/uploaded_images/5571-743924.jpg


 

Bernankov An-225 Mriya
Wed, 07/11/2012 - 14:28 | 2606967 Shameful
Shameful's picture

Don't you think Zimbabwe Ben and the Magical Money Printing gang owe it to the public to use American planes?  Buy American dammit!

Wed, 07/11/2012 - 14:31 | 2606993 Pinto Currency
Pinto Currency's picture

 

When you understate consumer goods price inflation by 4% and 2% GDP growth is actually 2% GDP contraction in real terms, then you can surprisingly get a zero job growth "recovery".

http://www.shadowstats.com/alternate_data

 

Wed, 07/11/2012 - 14:37 | 2607021 Precious
Precious's picture

New tools for easing?  Someone should introduce the Fed Board to glycerin suppositories.  They can test it out on each other.

Wed, 07/11/2012 - 14:48 | 2607077 Dumpster Fire
Dumpster Fire's picture

Who could downvote that?  Hilarious.

Wed, 07/11/2012 - 17:46 | 2607888 Tijuana Donkey Show
Tijuana Donkey Show's picture

Ben surfs this site, and the other person was MDB

Wed, 07/11/2012 - 14:49 | 2607079 Paul Atreides
Paul Atreides's picture

I'm suprised these meeting minutes aren't accompanied by carnival music....du du dududududududududu

Wed, 07/11/2012 - 15:11 | 2607194 a_charting_god
a_charting_god's picture

Or at least Canadian products like the Potus

Wed, 07/11/2012 - 14:39 | 2607011 Rusticus
Rusticus's picture

With a payload of 500000 pounds, Ben would need 44 of those to transport just 1 trillion in $100 bills. 

 

Wed, 07/11/2012 - 14:58 | 2607123 Bunga Bunga
Bunga Bunga's picture

Who takes one hundred dollar bills except a bank?

Wed, 07/11/2012 - 15:16 | 2607225 DosZap
DosZap's picture

Who takes one hundred dollar bills except a bank?

Lots of places..............filled your tank lately?.15gals will eat most of a C note.

I bought two soft drinks at a QuikTrip, and gave them a $100.00, no prob.

Wed, 07/11/2012 - 16:06 | 2607514 Yardfarmer
Yardfarmer's picture

what planet are you on? $100 are the new $10.

Wed, 07/11/2012 - 14:20 | 2606916 ZerOhead
ZerOhead's picture

Looks like the 'currency molesters' will be seeking some more stimulation...

Wed, 07/11/2012 - 14:13 | 2606860 SheepDog-One
SheepDog-One's picture

Ben now just hiding behind a rock pointing his finger yelling *BANG BANG*!

Wed, 07/11/2012 - 14:14 | 2606872 derek_vineyard
derek_vineyard's picture

how many fed members just gave up?

Wed, 07/11/2012 - 14:25 | 2606945 Hype Alert
Hype Alert's picture

That's what I wonder.  It's not that they can't do QE3, it's that we're past the point of diminishing returns and the next bite will cause us to puke it all up.

 

The comments Tyler posted and "A few" says there isn't much support for another round.

Wed, 07/11/2012 - 14:33 | 2607002 max2205
max2205's picture

garballygook....even the bonds don't like the damp towel treatment after their happy ending....

Wed, 07/11/2012 - 14:25 | 2606908 THECOMINGDEPRESSION
THECOMINGDEPRESSION's picture

This is how it goes

Joe: Hello?

Tom: Hello Joe. Feds called...Hit Gold.

Joe: I'm trying

 

Wed, 07/11/2012 - 15:08 | 2607175 gatorengineer
gatorengineer's picture

they done nailed the miners though... NUGT ouch....

Wed, 07/11/2012 - 15:09 | 2607177 vast-dom
vast-dom's picture

3pm float up levitation brought to you courtesy of TeH FeD behind-the-scenes flow with HFTs. Nice.

Wed, 07/11/2012 - 14:05 | 2606822 midgetrannyporn
midgetrannyporn's picture

bondz bitchez

Wed, 07/11/2012 - 14:05 | 2606823 eclectic syncretist
eclectic syncretist's picture

What can they do?  they've exhausted their toolbox and everything has failed.

Wed, 07/11/2012 - 14:15 | 2606880 mktfizx
mktfizx's picture

They are not out of bullets, tools, or ink.

 

The "additional stimulus measures" that were mentioned are outlined here:  http://www.federalreserve.gov/boarddocs/speeches/2002/20021121/default.htm

Wed, 07/11/2012 - 15:09 | 2607096 eclectic syncretist
eclectic syncretist's picture

If they aren't about out of tools, why would they have this statement in the minutes, immediately before the discussion on policy action?

"Several participants commented that it would be desirable to explore the possibility of developing new tools to promote more-accommodative financial conditions and thereby support a stronger economic recovery"

It would appear that their bullets have deteriorated from lead to rubber, in a manner of speaking.  All they can do is excrete debt.  They keep saying over and over again the government needs to accept more debt from them ASAP.

 

other highlights:

A number of factors continued to be seen as likely to limit the economic expansion to a moderate pace in the near term; these included slow growth or even contraction in some major foreign economies, ongoing and prospective fiscal tightening in the United States, modest growth in household income, and--despite some recent signs of improvement--continued weakness in the housing sector 

Moreover, recent adverse developments in Europe and tighter domestic financial conditions led the staff to revise down somewhat the medium-term forecast for real GDP

strains in global financial markets, which stemmed primarily from fiscal and banking concerns in Europe, had become more pronounced over the intermeeting period and continued to pose significant downside risks to the economic outlook; the possibility of a sharper-than-anticipated fiscal tightening in the United States also posed a downside risk

Participants expected that fiscal policy would continue to be a drag on economic growth over coming quarters. They generally also saw the federal budget situation as a downside risk to the economic outlook: If an agreement was not reached to address the expiring tax cuts and scheduled spending reductions in current law, a sharp tightening of fiscal policy would occur at the start of 2013.

The possibility that U.S. fiscal policy would be more contractionary than anticipated was also cited as a downside risk

Some members noted the risk that continued purchases of longer-term Treasury securities could, at some point, lead to deterioration in the functioning of the Treasury securities market that could undermine the intended effects of the policy.

A few members observed that it would be helpful to have a better understanding of how large the Federal Reserve's asset purchases would have to be to cause a meaningful deterioration in securities market functioning, and of the potential costs of such deterioration for the economy as a whole

A few participants indicated that they were seeing signs that very low interest rates might be inducing some investors to take on imprudent risks in the search for higher nominal returns

 

Wed, 07/11/2012 - 15:17 | 2607234 earleflorida
earleflorida's picture

seriously... what does a 'fed toolbox' look like? how much does it weigh? and do you need a 'special trade' ?

Wed, 07/11/2012 - 14:05 | 2606824 ACP
ACP's picture

I don't think there's enough room in a C5 for all the $100 bills that will be needed this time around.

Wed, 07/11/2012 - 14:16 | 2606886 ZerOhead
ZerOhead's picture

http://www.npr.org/blogs/thetwo-way/2012/05/09/152328255/indian-court-bl...

As luck would have it the  "Exxon Valdez" is still available...

Wed, 07/11/2012 - 14:36 | 2606893 ptoemmes
ptoemmes's picture

Well...there a few C17 Globemaster III that might be available.

And the Russkies might help out with an AN-225 Myira six engine beast or two (saw one takoff once). After all, the Russians are our conduit to the international space station.

But I suspect your point would still hold true....

Wed, 07/11/2012 - 14:07 | 2606826 tmosley
tmosley's picture

MOPEMOPEMOPEMOPEMOPEMOPEMOPEMOPEMOPE

NOPE.

Edit:  What do you want to bet the "new policy tools" include dumping the money the banks are holding at the Fed onto the market?

Wed, 07/11/2012 - 14:14 | 2606873 cougar_w
cougar_w's picture

But wait. That money is mostly comprised of money the Fed gave the banks in the first place.

Can they do that?

/sarc

Wed, 07/11/2012 - 14:06 | 2606827 koaj
koaj's picture

ZImbabwe here we come

Wed, 07/11/2012 - 14:34 | 2607004 Peter K
Peter K's picture

But our QE is sterilized, or haven't you heard?

Wed, 07/11/2012 - 14:08 | 2606837 FL_Conservative
FL_Conservative's picture

Looks like we might breach EURUSD 1.22 this afternoon.

Wed, 07/11/2012 - 15:12 | 2607199 DosZap
DosZap's picture
  • FOMC PARTICIPANTS SAW MODERATE GROWTH LIKELY IN COMING QUARTERS
  •  

    WHAT are they being served for lunch?........CRACK?.

    Wed, 07/11/2012 - 14:10 | 2606844 Frank N. Beans
    Frank N. Beans's picture

    mr. market is not happy

    Wed, 07/11/2012 - 14:10 | 2606845 gjp
    gjp's picture

    This almost sounds rational:

    a few saw inflation risks as tilted to the upside; they generally were skeptical of models that rely on economic slack to forecast inflation and were concerned that maintaining the current highly accommodative stance of monetary policy over the medium run risked eroding the  stability of inflation expectations, with a couple noting that large long-run fiscal imbalances also posed a risk.

    Gee, ya think??

    Better kick those guys off the committee stat.  These meetings are for certified ponziholics only.

    Wed, 07/11/2012 - 14:10 | 2606846 BlueStreet
    BlueStreet's picture

    The bulls will find something to hopelessly grasp onto by 3:30. 

    Wed, 07/11/2012 - 14:31 | 2606994 LeBalance
    LeBalance's picture

    their own balls? /hoist on yer own pertard/

    Wed, 07/11/2012 - 14:39 | 2607032 Hype Alert
    Hype Alert's picture

    Hilsenrath will weigh in with his take that QE3 is imminent.

    Wed, 07/11/2012 - 14:11 | 2606847 Hype Alert
    Hype Alert's picture

    Some members noted the risk that continued purchases of longer-term Treasury securities could, at some point, lead to deterioration in the functioning of the Treasury securities market that could undermine the intended effects of the policy.

     

    Translation: We've hit the wall!

    Wed, 07/11/2012 - 14:11 | 2606850 The worst trader
    The worst trader's picture

    Oh shit! I forgot to BTFD!

    Wed, 07/11/2012 - 14:23 | 2606935 Mark Carney
    Mark Carney's picture

    LOL

    Wed, 07/11/2012 - 14:13 | 2606863 Caviar Emptor
    Caviar Emptor's picture

    Please tell me the patient is ok! Please! All he needs is some vegetables. And he'll be tap dancing his way home.

    Wed, 07/11/2012 - 14:15 | 2606883 SheepDog-One
    SheepDog-One's picture

    I little sip of Gatorade, and this comatose patient is set to win the NYC Marathon!

    Wed, 07/11/2012 - 17:54 | 2607924 Tijuana Donkey Show
    Tijuana Donkey Show's picture

    It has electrolytes!

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