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FOMC Minutes: Fed To Start Releasing Official Fed Funds Rate Forecasts

Tyler Durden's picture




 

Summary of the yawn-inducing minutes via Bloomberg:

  • SEVERAL ON FOMC FAVORED CHANGE TO MID-2013 RATE VOW BEFORE LONG
  • FOMC SAID GLOBAL FINANCIAL STRAINS POSE `SIGNIFICANT' RISK
  • FED PLANS TO RELEASE OFFICIALS' FED FUNDS RATE FORECASTS (this is not news, and if the Fed is as accurate in "predicting" - note not setting - FF rates as it is in forecasting everything else, woe is us)
  • FOMC MEMBERS SAW LONG-TERM INFLATION EXPECTATIONS AS STABLE
  • FOMC MEMBERS SAW ECONOMY `EXPANDING AT A MODERATE RATE'
  • FOMC MEMBERS SAID CONSUMER SPENDING `STRONGER THAN EXPECTED'
  • MOST FOMC MEMBERS PREDICTED INFLATION WOULD `MODERATE'
  • 'A NUMBER' OF FOMC MEMBERS SAW POSSIBLE NEED FOR MORE EASING

Here is an artist's rendering of what the official Fed Fund's rate projection will look like for the next 10 years:

0.0%; 0.0%; 0.0%; 0.0%; 0.0%; 0.0%; 0.0%; 0.0%; 0.0%; 0.0%

And this is how the Fed will present QE in advance just so Bernanke can hike stock markets purely on expectations and not on actual monetization:

At the conclusion of their discussion, participants decided to incorporate information about their projections of appropriate monetary policy into the SEP beginning in January. Specifically, the SEP will include information about participants’ projections of the appropriate level of the target federal funds rate in the fourth quarter of the current year and the next few calendar years, and over the longer run; the SEP also willreport participants’ current projections of the likely timing of the first increase in the target rate given their projections of future economic conditions. An accompanying narrative will describe the key factors underlying those assessments as well as qualitative information regarding participants’ expectations for the Federal Reserve’s balance sheet. A number of participants suggested further enhancements to the SEP; the Chairman asked the subcommittee to explore such enhancements over coming months.

Overall, absolutely nothing new int his especially judging by the market reaction.

Full thing can be found here.

 

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Tue, 01/03/2012 - 15:08 | 2029728 Gubbmint Cheese
Gubbmint Cheese's picture

raise rates and add $150b to your interest costs.. good luck with that.

lol

Tue, 01/03/2012 - 15:12 | 2029748 nope-1004
nope-1004's picture

 

 

  • FOMC IS A JOKE
Tue, 01/03/2012 - 15:13 | 2029767 redpill
redpill's picture

END THE FED

 

Front page Drudge poll, vote for Ron Paul please

http://drudgereport.com/

Tue, 01/03/2012 - 15:35 | 2029895 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

WINNING!

Tue, 01/03/2012 - 19:56 | 2030851 knukles
knukles's picture

That synopsys sounds like a Jim O'Neil forecast.
All's well before the fall of humanity.

Tue, 01/03/2012 - 17:08 | 2030349 DosZap
DosZap's picture

redpill

 God Help Us..........................We need RP,and as much as I would give to see him get into the EO's and PDD's, and cancel all the fascist horseshit going on up there by the traitors we are  supposed have as representatives. 

Alas, facts are facts.

A vote for Paul is a vote for Obama.

 He has not palyed his cards right,and has not been slimy when needed, he scares too many middle Americans.

Rand has counseled him against a 3rd party run, which is great.............because WE cannot afford another  PEROT moment.

 

Tue, 01/03/2012 - 18:24 | 2030635 LawsofPhysics
LawsofPhysics's picture

Total Bullshit. but thanks for supporting the status quo troll.

Tue, 01/03/2012 - 15:10 | 2029746 GeneMarchbanks
GeneMarchbanks's picture

`A NUMBER' OF FOMC MEMBERS SAW POSSIBLE NEED FOR MORE EASING'

LOL. Oh mercy.... [sigh]

Tue, 01/03/2012 - 15:11 | 2029752 sbenard
sbenard's picture

How do you spell "disconnect"? F-O-M-C

Tue, 01/03/2012 - 15:13 | 2029770 SheepDog-One
SheepDog-One's picture

LOL, absolute impossibility for them to raise rates even to 1% without this whole hoopdie blowing to tiny bits. All the FED's stupid assesments depend totaly on continued unlimited free 0% money flow.

Tue, 01/03/2012 - 15:18 | 2029795 TheSilverJournal
TheSilverJournal's picture

How does anybody think we have capitalism in this country when we have a FOMC board that centrally plans the money? And money is pretty important because it is 1/2 of every transactions.

TheSilverJournal.com

Tue, 01/03/2012 - 15:19 | 2029802 ACP
ACP's picture

So, the Fed is not content with just lying about the present, they have to stretch their lies into the future in order to fuck with investors even more? What the HELL is wrong with those freaks?

Tue, 01/03/2012 - 15:39 | 2029818 ebworthen
ebworthen's picture

Unlimited market propping and bank bailouts to continue.

QE to be implicitly and shadow implemented with convoluted verbiage and terminology regarding undisclosed transactions.

Bernanke "Ctrl $" keystrokes to continue unabated regardless of the effect on debauchment of currency or national debt.

Interest rates to remain at 0% for savers, banks withdrawing from the public coffers, and +20% for European currency swaps.

Unemployment will not be a real problem until official BLS (BS) statistics show 17%+ (which will never happen).

SSDD

New reports to be printed on heavyweight parchment paper with pretty font, PDF's and PowerPoint's to have better graphics and 20% larger file size just because - all to increase "feelings" of legitimacy.

Tue, 01/03/2012 - 15:23 | 2029822 Schmuck Raker
Schmuck Raker's picture

The FED should just target Cash Flow at Lobbying Firms, and leave us Sod Farmers out of it.

Tue, 01/03/2012 - 15:24 | 2029834 my puppy for prez
my puppy for prez's picture


f you support Ron Paul, PLEASE go to drudgereport.com and vote in their IN HOUSE poll.  It's right at the top and DOES NOT link you or spam you.  I just voted and after it just shows the results.

RON PAUL 2012

Tue, 01/03/2012 - 15:40 | 2029926 ebworthen
Tue, 01/03/2012 - 15:59 | 2030031 my puppy for prez
my puppy for prez's picture

Thanks!  Also at http://www.politico.com/

Tue, 01/03/2012 - 15:25 | 2029841 flight77
flight77's picture

Serious questions from financial amateur: 
1. If the FED is allowed to expand its ballance sheet in the trillions without any consequences in real live, than debt doesn´t matter.
If it matters, when will it be felt by the people?
When will this debt come due?
What are the consequences?
Who is the counterpart ? The Banks who are sitting at the board of the FED? Hedgefunds? The tax payer?
I am gratefull for any information.

Tue, 01/03/2012 - 15:50 | 2029951 ebworthen
ebworthen's picture

Debt doesn't matter until it does (reference Greece, Italy, Spain, etc.).

The debt is due, but is simply gaining interest (in layman terms, unfulfilled promises on the backs of taxpayers).

The consequences of expanding the FED balance sheet is a devaluation of the currency.  Slowly at first, but as supply increases and money is "printed" in digital databases and sloshed about the economy, the value of the dollar goes down (not to mention eventually fomenting inflation, stagflation, and hyperinflation - depending).

Counter-party for debt?  Never the banks, always the average household.  Ultimately, the counter-party for the debt is the lives of children, born and unborn, the future of the Nation and the likelihood of War, Famine, Pestilence, wailing and gnashing of teeth, etc.

Tue, 01/03/2012 - 16:17 | 2030110 flight77
flight77's picture

Thanks for your answers!!!
Okay, with government debt reality kicks in through raising interest rate, downgrades a.s.o. but with real estate??
F.e. A Bank owns land in Ireland.
They bought it for 300 Euros the squaremeter.
Now the land is worth 10 Euros, but the Bank is allowed to keep it in the books with 300.
They can even pledge this land as collateral to the ECB, and lend cheap money with it.
So, where is the problem?

Tue, 01/03/2012 - 16:55 | 2030294 ebworthen
ebworthen's picture

At some point, there will be a call on the asset.

Bernie Madoff went over 20 years on promises.

The collapse came when there were more calls for their assets versus investing.

When liquidation calls come in out of a need to pay debt, the bank will have to realize the loss.

This already happened in the CDS/MBS crash of 2008, however, rather than realizing losses the banks shifted the burden to taxpayers through a Sovereign/Politician proxy.

It's a Ponzi scheme, but on a global scale.

Politicians are desperate to keep the status quo to get re-elected, bankers don't want to realize any losses and must have their bonuses, and many citizens do not understand that a generational theft rarely seen in history has - and is - occurring.

Tue, 01/03/2012 - 15:53 | 2029996 NotApplicable
NotApplicable's picture

It only works as long as they can kick the debt can down the ZIRP4EVA road. Of course, there will be consequences, like the death of the financial industry (or any entity depending on interest income).

So.... in this case, sovereign debt won't matter, as ZIRP allows for infinite growth, which the people will feel it as a continual decay in their standard of living.

The largest consequence will be the death of capitalism, as productive enterprise has been hollowed out and replaced with financial plunder. The end result, short of societal collapse, will be the Fed and fedgov owning absolutely everything, with the sheeple having no choice but to support this beast, as it will be the sole source of sustenance.

Tue, 01/03/2012 - 16:29 | 2030156 flight77
flight77's picture

But for now, lots of these Dollars are simply exported to the world. It deems to be, that there is big demand for Dollars. Otherwise, the interest rate on US Bonds would be much higher. I live in Germany and I am always surprised, that the USD doesn´t loose more ground. Okay, Draghula is a money printer from Goldman Sachs, like Mario Monti or Papademos in Greece. Now, they want to kill Orban in Hungary and put another Goldman Sachs man on the throne. Goldman Sachs seems to run the show here in Europe.
I would simply like to know: Who owns Goldman Sachs???

Tue, 01/03/2012 - 17:06 | 2030342 ebworthen
ebworthen's picture

See section titled "Since 1999":  http://en.wikipedia.org/wiki/Goldman_Sachs

"As of 2009, after further stock offerings to the public, Goldman is 67% owned by institutions (such as pension funds and other banks)."

Tue, 01/03/2012 - 16:10 | 2030081 optimator
optimator's picture

Think of your credid card having no limit.  Think of what happens when the interest becomes too much to pay.

Tue, 01/03/2012 - 17:21 | 2030408 GMadScientist
GMadScientist's picture

I've got it! You transfer it to another credit card.

What'd I win?

/sarc (remember folks: this is CB "logic", not mine)

Tue, 01/03/2012 - 15:26 | 2029849 williambanzai7
williambanzai7's picture

GOLDMAN SACHS NEW YEARS PARTY

Tue, 01/03/2012 - 15:38 | 2029911 Dick Darlington
Dick Darlington's picture

FOMC MEMBERS SAID CONSUMER SPENDING `STRONGER THAN EXPECTED'

Obviously the same FOMC members didn't get the memo of record returns of holiday gifs. But who cares, msm had their moment in the sun spinning "record sales" and what not and the headline "data" figures are out. Nobody cares when they get revised down as always coz "efficient markets" sure know how to "price it in" don't they...

Tue, 01/03/2012 - 15:38 | 2029912 Mr Lennon Hendrix
Mr Lennon Hendrix's picture
  • 'A NUMBER' OF FOMC MEMBERS SAW POSSIBLE NEED FOR MORE EASING

Is that zombie speak for, "BRAAIINS!"

Tue, 01/03/2012 - 15:44 | 2029945 vote_libertaria...
vote_libertarian_party's picture

Fed Funds forecast?

 

How hard is that?

 

0.....0......0....0....etc

Tue, 01/03/2012 - 15:56 | 2030012 NotApplicable
NotApplicable's picture

________________________________...

Tue, 01/03/2012 - 17:18 | 2030399 GMadScientist
GMadScientist's picture

No, that's what they'll do; they're talking about what they'll say they'll do.

Tue, 01/03/2012 - 15:44 | 2029947 you enjoy myself
you enjoy myself's picture

i still don't understand how the fixed income retiree crowd is not rioting in the streets.  they're literally being robbed.

Tue, 01/03/2012 - 15:55 | 2030003 ebworthen
ebworthen's picture

Rioting is for the youth.

Perhaps if they see the suffering of their Parents/Relatives they will get pissed off enough; or see any inheritance evaporating into zero and no house because it is owned by the bank from reverse mortgages.

Many retirees are taking their money out of the markets, paying off debt, parking it in Treasuries or just cash. 

Many have seen this movie before and remember that the stagnation of the late 60's early 70's and stagflation of the Disco era led to high rates (12%-15%); which was not bad if you had cash.

p.s. - the FED doesn't give a shit about anyone but the banks.

Tue, 01/03/2012 - 16:02 | 2030043 NotApplicable
NotApplicable's picture

Most retirees are in shock. Besides, who are they going to turn to for help, the criminals they trusted their whole lives?

Tue, 01/03/2012 - 15:44 | 2029949 vote_libertaria...
vote_libertarian_party's picture

Hey, Reggie M is on CNBC.

Tue, 01/03/2012 - 16:08 | 2030072 skepticCarl
skepticCarl's picture

This is a replay of 2003-2004, where the economy was slowly recovering, but the Fed, under Greenspan, kept the easy money pedal to the metal for years, inflating the housing and overall credit bubble.

This slow recovery (get over it uber bears, we are in a recovery) will probably produce a stock and commodity bubble, as the dollar continues to loose value, and the price of those things measured by the the buck will climb.  Delevegering of the banks will be ongoing, and keep hyperinflation at bay.

So, buy your PM's, stocks, commodities, and even good real estate when you spot the bargains.

Tue, 01/03/2012 - 16:20 | 2030114 Smiddywesson
Smiddywesson's picture

This kind of hands on is what's for dinner for the next several years.  Bernanke's 10/31/2003 speech on how to fix the Japanese deflation.  Put the petal to the metal with price targets to restore pre-collapse price levels.

"What I have in mind is that the Bank of Japan would announce its intention to restore the price level (as measured by some standard index of prices, such as the consumer price index excluding fresh food) to the value it would have reached if, instead of the deflation of the past five years, a moderate inflation of, say, 1 percent per year had occurred. (I choose 1 percent to allow for the measurement bias issue noted above, and because a slightly positive average rate of inflation reduces the risk of future episodes of sustained deflation.) Note that the proposed price-level target is a moving target, equal in the year 2003 to a value approximately 5 percent above the actual price level in 1998 and rising 1 percent per year thereafter.2 Because deflation implies falling prices while the target price-level rises, the failure to end deflation in a given year has the effect of increasing what I have called the price-level gap (Bernanke, 2000). The price-level gap is the difference between the actual price level and the price level that would have obtained if deflation had been avoided and the price stability objective achieved in the first place. "

Teacher:  And how do we do that, anyone?  Yes, Benjamin? 

Ben:  If you refer to my 11/21/2002 speech, you will see that we all peg to gold, collectively devalue our fiat, revalue gold (to the moon) and print like crazy. 

Smiddy:  He's lying, we will all peg to the SDR and tie the SDR to gold!

Ben: Will not!  Gold's just tradition!

Smiddy:  Will so!  That's what you said in 2003, and 2003!  That's what Greenspan is saying too.  Liar, liar, pants on fire. 

Tue, 01/03/2012 - 17:17 | 2030391 GMadScientist
GMadScientist's picture

"because a slightly positive average rate of inflation reduces the risk of future episodes of sustained deflation"

Hahahahaaaaaa. Monetarist comedy! Ya gotta love that deadpan delivery.

Tue, 01/03/2012 - 16:30 | 2030164 flight77
flight77's picture

Thanks for your answers!!!
Okay, with government debt reality kicks in through raising interest rate, downgrades a.s.o. but with real estate??
F.e. A Bank owns land in Ireland.
They bought it for 300 Euros the squaremeter.
Now the land is worth 10 Euros, but the Bank is allowed to keep it in the books with 300.
They can even pledge this land as collateral to the ECB, and lend cheap money with it.
So, where is the problem?

Tue, 01/03/2012 - 17:14 | 2030372 GMadScientist
GMadScientist's picture

The poor punter who lost his equity and keeps getting turned down for that "cheap money" who won't be buying anything anytime soon.

 

Tue, 01/03/2012 - 16:38 | 2030205 zebra
zebra's picture

They may as well add prediction for which direction the sun is going to rise. (hint: it is east).

Tue, 01/03/2012 - 17:12 | 2030365 GMadScientist
GMadScientist's picture

Uh huh...let's see how 'moderate' inflation is after WTI tops $120/bbl my little "doves".

Wed, 01/04/2012 - 04:48 | 2032135 Sokhmate
Sokhmate's picture

To summarize the summary in one word: nothing.

 

the art of saying nothing.

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