FOMC Saw No Needs To Ease Unless Growth Slows

Tyler Durden's picture

So much for the Hatzius and Hilsenrath prognostications. Headlines coming in:

  • FOMC SAW NO NEED TO EASE ANEW UNLESS GROWTH SLOWS, MINUTES SHOW
  • MOST FOMC PARTICIPANTS SAW `LITTLE EVIDENCE OF COST PRESSURES
  • FOMC PARTICIPANTS SAID LABOR MARKET CONDITIONS HAD IMPROVED
  • MOST FOMC PARTICIPANTS EXPECTED INFLATION RATE AT 2% OR LESS
  • MANY FOMC PARTICIPANTS SAW `EASED' STRAINS IN GLOBAL MARKETS
  • MOST ON FOMC SAW TEMPORARY IMPACT FROM RISING OIL, GAS PRICES
  • FOMC SAID SIGNIFICANT OUTLOOK CHANGE COULD ALTER 2014 RATE PLAN

Apparently $4 gas has an impact.

The optimism abounds:

Participants generally observed the continued improvement in labor market conditions since the January meeting. A couple of participants stated that the progress suggested by the payroll numbers was also apparent in a broad array of labor market indicators, and others noted survey measures suggesting further solid gains in employment going forward. One participant pointed to inflation readings and a high rate of long- duration unemployment as signs that the current level of output may be much closer to potential than had been thought, and a few others cited a weaker path of potential output as a characteristic of the present expansion.

...If only so far - some appear to read Zero Hedge:

However, a number of participants judged that the labor market   currently featured substantial slack. In support of that view, various indicators were cited, including aggregate hours, which during the recession had exhibited a decline that was particularly severe by historical standards and remained well below the series’ pre-recession peak; the high number of persons working part time for economic reasons; and low ratios of job openings to unemployment and of employment to population.

Also, on the impact of weather:

Several participants noted that the unseasonably warm weather of recent months added one more element of uncertainty to the interpretation of incoming data, and that this factor might account for a portion of the recent improvement in indicators of employment and housing.

But this apparently means little: $2 trillion in CB liquidity apparently may even boost GDP... Briefly:

In a contrasting view, the improvements registered in labor market indicators could be seen as raising the likelihood that GDP data for the recent  period would undergo a significant upward revision.

Guess who is who here, when discussing inflation:

With longer-run inflation expectations still well anchored, most participants anticipated that after the temporary effect of the rise in oil and gasoline prices had run its course, inflation would be at or below the 2 percent rate that they judge most consistent with the Committee’s dual  mandate. Indeed, a few participants were concerned that, with the persistence of considerable resource slack, inflation might be below the mandate-consistent rate for some time. Other participants, however, were worried that inflation pressures could increase as the expansion  continued; these participants argued that, particularly in light of the recent rise in oil and gasoline prices, maintaining the current highly  accommodative stance of monetary policy over the medium run could erode the stability of inflation expectations and risk higher inflation.

Yet at the end of the day all depends on the Russell 2000, pardon, the Economy:

With the economic outlook over the medium term not greatly changed, almost all members again agreed to indicate that the Committee expects to maintain a highly accommodative stance for monetary policy and currently anticipates that economic conditions—including low rates of resource  utilization and a subdued outlook for inflation over the medium run—are likely to warrant exceptionally low levels for the federal funds rate at least  through late 2014. Several members continued to anticipate, as in January, that the unemployment rate would still be well above their estimates of its longer-term normal level, and inflation would be at or below the Committee’s longerrun objective, in late 2014. It was noted that the Committee’s forward guidance is conditional on economic developments, and members concurred that the date given in the statement would be  subject to revision in response to significant changes in the economic outlook.

The hawk, in this case Lacker, speaks:

In contrast, one member judged that maintaining the current degree of policy accommodation much beyond this year would likely be inappropriate; that member anticipated that a tightening of monetary policy would be necessary well before the end of 2014 in order to keep inflation close to the Committee’s 2 percent objective.

And more form Lacker:

Mr. Lacker dissented because he did not agree that economic conditions were likely to warrant exceptionally low levels of the federal funds rate at least through late 2014. In his view, with inflation close to the Committee’s objective of 2 percent, the economy expanding at a moderate pace, and downside risks somewhat diminished, the federal funds rate will most likely need to rise considerably sooner to prevent the emergence of inflationary pressures. Mr. Lacker continues to prefer to provide forward guidance regarding future Committee policy actions through the inclusion  of FOMC participants’ projections of the federal funds rate in the Summary of Economic Projections (SEP).

Finally, this is rather curious:

In addition, several participants suggested that it could be helpful to discuss at a future meeting some alternative economic scenarios and the monetary policy responses that might be seen as appropriate under each one, in order to clarify the Committee’s likely behavior in different  contingencies.

Now, by alternative, do they mean scenarios just in case the Fed may be, just in the off chance, wrong?

Full report link.

 

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Squishi's picture

what a game of chicken

DormRoom's picture

ALL IN institutional investors lose.  thank, god.

Squishi's picture

sheeeeeeeeeeeeeeeeeeeeeeep

slaughterer's picture

The Fed has to read more Zero Hedge if it wants to find arguments to justify more fiat debasement.  Lucky us, another sale on gold and silver coming up. 

defencev's picture

Continue bullshitting, Tyler. You keep predicting that there will be QE3 and I clearly stated that there will be no QE3 before elections for very simple reason:

QE3 means higher oil prices and nonreelection of Obama. For Bernanke:

his job is lost. The problem is that you can predict nothing.

lolmao500's picture

Apparently $4 gas has an impact.

Apparently not...

MOST FOMC PARTICIPANTS SAW `LITTLE EVIDENCE OF COST PRESSURES

LowProfile's picture

(whistles past graveyard)

XenoFrog's picture

Green silver day just fell off a cliff. Thanks for that kick in the ass.

SheepDog-One's picture

Dont believe their lies, they know good and well gas prices are a boat anchor around their neck.

Racer's picture

Liar liar pants on fire

Let them eat iPads's picture

High gas prices are transitory.

mayhem_korner's picture

 

 

Today's high gas prices are tomorrow's low gas prices.

AldousHuxley's picture

gas and housing prices are not high. it is just dollar being devalued in terms of purshasing power.

DosZap's picture

MOST FOMC PARTICIPANTS SAW `LITTLE EVIDENCE OF COST PRESSURES

 

Saw no reason?..............check out seafood,beef, and pork,poultry,cereals, etc prices along w/fuel.................

Prices are DOUBLE a year ago.

Racer's picture

All FOMC PARTICIPANTS SAW LITTLE EVIDENCE

because they are completely blind and and ONE amoeba is far more intelligent than them all put together

derek_vineyard's picture

my diet of potatoes and frozen corn from walmart has been pretty stable in price

hedgehog9999's picture

These fokers live off expense accounts so they don't buy food or gas, it is all covered by us so inflation is "infokinvisible to them"

2% my arse.... even hookers are charging more so I'm told.....

AldousHuxley's picture

CPI-w 3% = average of 2% in housing + 4% in non-housing

 

http://www.bls.gov/news.release/cpi.t04.htm

 

a lot of cost of food is really energy prices to transport them around

AL_SWEARENGEN's picture

These limber dick cocksuckers didn't see the crysis coming and now they say all will be well!  If all is well why are rates still at 0.  Why is unemployment still WAY up.  Why are commodity prices up?

SheepDog-One's picture

Exactly, if things are so great now, then why do we still have 0% bullshit rates? Schroedingers markets, alive, yet also totaly dead.

firstdivision's picture

...Markets....must.....fall.....for....QE.....

SheepDog-One's picture

Yet, they cant let markets fall because every time they fall even a little bit, volume goes thru the roof and risks becoming an all-out feeding frenzy. I dont believe they can set the dials for '10% market drop, then put on the brakes and hold'...out of their control now.

SeverinSlade's picture

And these idiots on CNBS actually thought that the Fed would ease with the S&P at 1400+ and gas at 4+

TWSceptic's picture

Is this the reason the PM are down right now?

LowProfile's picture

Gold is down.

Silver is not.

Hmm...

DosZap's picture

Gold is down.

Silver is not.

 

BOTH ARE

LowProfile's picture

I see it now (and thought it strange), I must have been getting bad (old) data for PSLV quotes.  Showing correctly now.

However, silver is doing better relative to gold, which is out of character.

CvlDobd's picture

Don't rely on fucked up ETPs to get a price quote.

Gringo Viejo's picture

PAPER gold & silver are down.

Lost Wages's picture

FOMC vs. BILL GROSS.

Which one is leading us down the primrose path?

Robot Traders Mom's picture

Inflation will be under 2% for those of you that don't eat, sleep, or shit.

Dr. Engali's picture

That's only if it's a seasonably adjusted shit.

Dr. Engali's picture

I'd like to know where they are shopping to see little evidence of cost pressures.

Squid Vicious's picture

transitorily bullish...

and the bots sing:

must...buy...this...dip

must...buy...this ...dip

SeverinSlade's picture

Record low volumes and retail not touching this ponzi market with a 10 foot pole...This could get ugly.

Whoa Dammit's picture

FOMC AND FOMC PARTICIPANTS LAUDED FOR EOE HIRING OF THE WILLFULLY BLIND.

Agent P's picture
  • MOST FOMC PARTICIPANTS ARE OUT OF TOUCH WITH REALITY
PicassoInActions's picture

MOST ON FOMC SAW TEMPORARY IMPACT FROM RISING OIL, GAS PRICES

 

it's been temporary and transitionary for last 3 years... amazing...

 

we need to have a new defenition of temporary

lizzy36's picture

Actually oil prices has been transitory since 2007.

Five years later amazing that no politician realizes that the USA does not work on $4 a gallon gas. So they better come up with some fucking policies that don't include a Volt or solar panels.

Dr. Engali's picture

Until they can tell me how they can fund a 1.3 trillion dollar deficit I'm calling bullshit.

BrokeDayTrader's picture

Eat It Bulls!!!!

I'm in the money now!!!!

maxmad's picture

bye bye DOW!!!! BEARISH!!!!!!

Al Huxley's picture

Right, no more easing - so who's going to buy the debt?

fonzannoon's picture

I think the idea is Al that the retail guy will once he sees a thousand points come off the dow.

SheepDog-One's picture

I wouldnt buy anything until around DOW 5,000.

SeverinSlade's picture

Or until Gold:DOW reaches 1:1