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FOMC Saw No Needs To Ease Unless Growth Slows

Tyler Durden's picture


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


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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Tue, 04/03/2012 - 14:04 | 2313767 Squishi
Squishi's picture

what a game of chicken

Tue, 04/03/2012 - 14:08 | 2313794 GeneMarchbanks
GeneMarchbanks's picture

WTI always wins.

Tue, 04/03/2012 - 14:10 | 2313804 DormRoom
DormRoom's picture

ALL IN institutional investors lose.  thank, god.

Tue, 04/03/2012 - 14:22 | 2313879 Squishi
Squishi's picture


Tue, 04/03/2012 - 14:35 | 2313946 slaughterer
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. 

Wed, 04/04/2012 - 02:18 | 2315544 AldousHuxley
AldousHuxley's picture

God doesn't read bibles

Tue, 04/03/2012 - 16:17 | 2314459 defencev
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.

Tue, 04/03/2012 - 14:05 | 2313769 lolmao500
lolmao500's picture

Apparently $4 gas has an impact.

Apparently not...


Tue, 04/03/2012 - 14:12 | 2313816 LowProfile
LowProfile's picture

(whistles past graveyard)

Tue, 04/03/2012 - 14:13 | 2313819 XenoFrog
XenoFrog's picture

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

Tue, 04/03/2012 - 14:19 | 2313862 SheepDog-One
SheepDog-One's picture

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

Tue, 04/03/2012 - 14:05 | 2313774 Racer
Racer's picture

Liar liar pants on fire

Tue, 04/03/2012 - 14:05 | 2313775 Let them eat iPads
Let them eat iPads's picture

High gas prices are transitory.

Tue, 04/03/2012 - 14:08 | 2313791 mayhem_korner
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Today's high gas prices are tomorrow's low gas prices.

Wed, 04/04/2012 - 02:27 | 2315547 AldousHuxley
AldousHuxley's picture

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

Tue, 04/03/2012 - 14:21 | 2313831 DosZap
DosZap's picture



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

Prices are DOUBLE a year ago.

Tue, 04/03/2012 - 14:29 | 2313913 Racer
Racer's picture


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

Tue, 04/03/2012 - 18:04 | 2314750 derek_vineyard
derek_vineyard's picture

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

Tue, 04/03/2012 - 22:16 | 2315262 hedgehog9999
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.....

Wed, 04/04/2012 - 02:40 | 2315565 AldousHuxley
AldousHuxley's picture

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


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

Tue, 04/03/2012 - 14:05 | 2313776 AL_SWEARENGEN

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?

Tue, 04/03/2012 - 14:09 | 2313797 SheepDog-One
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.

Tue, 04/03/2012 - 14:06 | 2313780 firstdivision
firstdivision's picture


Tue, 04/03/2012 - 14:11 | 2313806 SheepDog-One
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.

Tue, 04/03/2012 - 14:06 | 2313781 SeverinSlade
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+

Tue, 04/03/2012 - 14:13 | 2313824 Randall Cabot
Randall Cabot's picture

Yes. Yes they did.

Tue, 04/03/2012 - 14:07 | 2313783 TWSceptic
TWSceptic's picture

Is this the reason the PM are down right now?

Tue, 04/03/2012 - 14:13 | 2313827 LowProfile
LowProfile's picture

Gold is down.

Silver is not.


Tue, 04/03/2012 - 14:20 | 2313872 DosZap
DosZap's picture

Gold is down.

Silver is not.



Tue, 04/03/2012 - 14:34 | 2313935 LowProfile
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.

Tue, 04/03/2012 - 18:23 | 2314795 CvlDobd
CvlDobd's picture

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

Tue, 04/03/2012 - 14:39 | 2313940 Gringo Viejo
Gringo Viejo's picture

PAPER gold & silver are down.

Tue, 04/03/2012 - 14:07 | 2313785 Lost Wages
Lost Wages's picture


Which one is leading us down the primrose path?

Tue, 04/03/2012 - 14:08 | 2313793 Robot Traders Mom
Robot Traders Mom's picture

C. Ferris Bueller

Tue, 04/03/2012 - 14:07 | 2313789 Robot Traders Mom
Robot Traders Mom's picture

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

Tue, 04/03/2012 - 14:10 | 2313802 Dr. Engali
Dr. Engali's picture

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

Tue, 04/03/2012 - 14:08 | 2313790 Dr. Engali
Dr. Engali's picture

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

Tue, 04/03/2012 - 14:09 | 2313795 Squid Vicious
Squid Vicious's picture

transitorily bullish...

and the bots sing: ...dip

Tue, 04/03/2012 - 14:09 | 2313796 SeverinSlade
SeverinSlade's picture

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

Tue, 04/03/2012 - 14:18 | 2313799 Whoa Dammit
Whoa Dammit's picture


Tue, 04/03/2012 - 14:11 | 2313808 Agent P
Agent P's picture
Tue, 04/03/2012 - 14:17 | 2313809 PicassoInActions
PicassoInActions's picture



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


we need to have a new defenition of temporary

Tue, 04/03/2012 - 14:33 | 2313937 lizzy36
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.

Tue, 04/03/2012 - 14:11 | 2313810 Dr. Engali
Dr. Engali's picture

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

Tue, 04/03/2012 - 14:11 | 2313811 BrokeDayTrader
BrokeDayTrader's picture

Eat It Bulls!!!!

I'm in the money now!!!!

Tue, 04/03/2012 - 14:12 | 2313815 maxmad
maxmad's picture

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

Tue, 04/03/2012 - 14:13 | 2313818 Al Huxley
Al Huxley's picture

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

Tue, 04/03/2012 - 14:14 | 2313832 fonzannoon
fonzannoon's picture

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

Tue, 04/03/2012 - 14:16 | 2313843 SheepDog-One
SheepDog-One's picture

I wouldnt buy anything until around DOW 5,000.

Tue, 04/03/2012 - 14:19 | 2313867 SeverinSlade
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Or until Gold:DOW reaches 1:1

Tue, 04/03/2012 - 14:18 | 2313855 Al Huxley
Al Huxley's picture

I don't think retail has the money to fund the US Gov't's debt, let alone state and municipal.  It's the FED or nobody.

Tue, 04/03/2012 - 14:18 | 2313854 SeverinSlade
SeverinSlade's picture

Again, this doesn't mean the Fed is done easing.  They're just not easing with inflation (both in commodities, food, gas/oil, and yes, equities) being where it is presently.  The markets have to experience a significant correction before further easing can be justified. 

Tue, 04/03/2012 - 14:24 | 2313892 SheepDog-One
SheepDog-One's picture

If what youre saying is true then theres absolutely no point to 'easing' at all. 

Tue, 04/03/2012 - 14:36 | 2313957 SeverinSlade
SeverinSlade's picture

The point of easing is to destroy the USD and enslave the world with more and more debt under the guise of trying to "save the economy from disaster" while ushering in the "need" for globalism.  No this isn't conspiracy theory...Just look at what's happening in Europe.

Central banks will always use the THREAT of deflation to justify further inflationary policies.  Jefferson warned us.  The Rothschilds openly said that inflation was the best way to transfer all of the world's wealth to the selected few elite.

"Let me issue and control a Nation's money and I care not who makes its laws. The few who can understand the system will be either so interested in its profits, or so dependent on its favours, that there will be no opposition from that class, while, on the other hand, that great body of people mentally incapable of comprehending the tremendous advantage that Capital derives from the system, will bear its burden without complaint and, perhaps, without even suspecting that the system is inimical to their interests." - Mayer Amschel Rothschild, 1838

“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." - John Maynard Keynes

"By continuing the process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens." - Lenin

Tue, 04/03/2012 - 22:32 | 2315282 hedgehog9999
hedgehog9999's picture

the fokers will print they just don't say it. Someone has to fund Obama's broken pocket and it ain't chinese anymore, to keep rates low as well even if some white knight buys treasuries, they will still need to put a bid under to ensure rates don't suddenly start creeping as they did Today, that is printing in my books as the amounts are exhorbitant..................

and as usual some of that will leak into oil, the  etc, etc....

2012 is going to get fun going  towards the summer....



Tue, 04/03/2012 - 14:13 | 2313822 fonzannoon
fonzannoon's picture

Sem bearish for bonds too.

Tue, 04/03/2012 - 14:18 | 2313852 CvlDobd
CvlDobd's picture

All markets move on the same info, same as always.

Trouble is the direction is now the same as well.

We're fucked.

Tue, 04/03/2012 - 14:15 | 2313825 SheepDog-One
SheepDog-One's picture

'No QE3'  confirmed....well hell how long until thats turned BULLISH! Or, maybe its time to lop off some jiucy bull steaks here finally.

Tue, 04/03/2012 - 14:16 | 2313840 baby_BLYTHE
baby_BLYTHE's picture

4 years still no congressional budget and no FED exit strategy. It is print or die bitchez!

Tue, 04/03/2012 - 14:18 | 2313853 SheepDog-One
SheepDog-One's picture

And apparently they cant print! Looks like possible rough sailing ahead for bubble equities.

Tue, 04/03/2012 - 14:30 | 2313923 Agent P
Agent P's picture

Who needs a budget when you have a Bernanke?

Tue, 04/03/2012 - 14:19 | 2313860 SeverinSlade
SeverinSlade's picture

The HFTs are aggressively buying the $2 discount on AAPL.

Tue, 04/03/2012 - 14:19 | 2313863 Below Zero
Below Zero's picture

To think that people wait around for weeks salivating on what the minutes might say. Once again it is clear that the Captain and his crew aboard the S. S. Titanic are steaming full speed ahead and nothing will alter that course.

Tue, 04/03/2012 - 14:20 | 2313870 Let The Wurlitz...
Let The Wurlitzer Play's picture

Im glad they got the weather narrative going - I did not know that they also taught meteorology at harvard/princeton.  But all in all, it seems that everything is fine.


Tue, 04/03/2012 - 14:24 | 2313891 Piranhanoia
Piranhanoia's picture

temporary; (new financial definition)  acute or permanent.

and the winner, "significant outlook change could alter 2014 rate plan"   (admitting to the obvious)

If they can't tell the truth about anything, and have to deliberately mislead about everything,  things must really be looking up!

just not for human beings.

Tue, 04/03/2012 - 14:36 | 2313956 Whoa Dammit
Whoa Dammit's picture

We are at 2% inflation. We have always been at 2% inflation. 

(With my apologies to George Orwell.)

Tue, 04/03/2012 - 14:29 | 2313916 Gringo Viejo
Gringo Viejo's picture

After reading, I thought of the scene in Blazing Saddles where Governor LePetomane was ranting at his advisors about "saving our phoney-baloney jobs".

"I didn't get a harumph outta that guy. You watch your ass!"

Tue, 04/03/2012 - 14:33 | 2313939 Mongo
Mongo's picture

New Normal: "Growth slows" is when DJIA drops 0.5% in 4 hrs...

Tue, 04/03/2012 - 14:41 | 2313980 ActionFive
ActionFive's picture

Just another move to adjust the 'dials'. Fed says stay in dollars and stocks while they monetize.

Tue, 04/03/2012 - 14:56 | 2314058 MFL8240
MFL8240's picture

Read the comic pages up top.  The games never end with this group!

Tue, 04/03/2012 - 14:59 | 2314067 Meremortal
Meremortal's picture

"Apparently $4 gas has an impact."


And apparently it's not the expected impact.

People seemed to feel fine at $2.50. If I drive 13,000 miles a year, that extra $1.50 means I'm spending an extra $886 a year. I know, I'll spend $31,000 on a Volt (after rebate) and increase my mileage by a factor of two, saving me $443 a year!

SMOKIN' deal! What's it cost to plug that baby in per month? Oh well, who cares? The oceans will recede after I buy my Volt!


Tue, 04/03/2012 - 15:07 | 2314098 carbonmutant
carbonmutant's picture

The FED will find a growing need from the WH the closer we get to elections....

Tue, 04/03/2012 - 15:12 | 2314136 YesWeKahn
YesWeKahn's picture

I love this "


    The only time when the oil price was "temporarily" down was during Leiman bankrupcy.

    I guess that Bernanke is only temporarily smart.

    Tue, 04/03/2012 - 15:57 | 2314362 lolmao500
    lolmao500's picture


    MOST ON FOMC SAW TEMPORARY IMPACT FROM RISING OIL, GAS PRICES" Temporary good... since they gonna attack Iran and that will make them much higher.
    Tue, 04/03/2012 - 16:04 | 2314411 mantrid
    mantrid's picture

    "Other participants, however, were worried that inflation pressures could increase as the expansion continued"

    gold plunging on inflation expectations. now THAT is the New Normal.

    Wed, 04/04/2012 - 02:39 | 2315561 Clowns on Acid
    Clowns on Acid's picture

    "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"

    Does this means that they will be looking to consider backing the USD w/ Gold revalued at 3000/oz?

    Now that would work, but it would demolish JPM and Goldman....

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