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Goldman's Take On The FOMC Statement

Tyler Durden's picture





 

Goldman, whose Bill Dudley runs the New York Fed, and the Fed in general, gives the official party line on how to interpret the Fed's statement. Summary: all is well.

BOTTOM LINE: On net the FOMC statement is very close to our expectations as the FOMC upgrades its description of the economic outlook, acknowledges the impact of oil prices on inflation, and softens (but retains) the "significant downside risks" phrase.

MAIN POINTS:

1. On net the FOMC statement is very close to our expectations. In particular, the FOMC continues to see "significant downside risks" but softened this statement to acknowledge that "strains in global financial markets have eased." In the same vein the committee dropped the phrase "notwithstanding some slowing in global growth" from the first paragraph.

2. As expected, the FOMC upgraded its assessment of the economic outlook. First, the committee acknowledges that the unemployment rate has declined "notably" in recent months, and that it expects it to decline "gradually" (instead of "only gradually"). Second, the committee upgraded its assessment of business fixed investment from "has slowed" to "has continued to advance." Third, the committee now expects "moderate" instead of "modest" growth over the coming quarters.

3. The FOMC acknowledges the likely implications of the recent run-up in energy prices. First, the statement continues to say that "inflation has been subdued in recent months," but the committee added "although prices of crude oil and gasoline have increased lately." Second, the committee acknowledges that "the recent increase in oil and gasoline prices will push up inflation temporarily" but continues to anticipate that "subsequently inflation will run at or below the rate that it judges most consistent with its dual mandate."

4. Richmond Fed President Lacker again dissented against the action at today’s meeting. However, he strengthened the rationale for his dissent. He now says that he "does not anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate through late 2014." Previously, he had only dissented against the forward-looking language.

BOTTOM LINE: The FOMC signaled that policy rates will remain low “at least through late 2014”. The next release at 2pm will clarify how this relates to meeting participants’ new funds rate forecasts.

 


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Tue, 03/13/2012 - 15:12 | Link to Comment Peter K
Peter K's picture

All is not well, if your Bill Gross:)

Tue, 03/13/2012 - 15:14 | Link to Comment Seasmoke
Seasmoke's picture

i think they are on a mission to blow Gross up !

Tue, 03/13/2012 - 15:19 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

They heard he was feelin' a little Ron Paulish. Thought they might make him feel a little more Mittens-ish.

Tue, 03/13/2012 - 15:33 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Goldman Sachs' FOMC regurgitation-translation segment is sponsored by Charles Schwab©, CNB(S)C© & Apple's new iPadHD© (now fortified with 100% of the USDA's daily requirements of 23 essential vitamins and minerals).

Stick with Chuck & Cramer; now viewable on the NasdApple iPadHD!

Tue, 03/13/2012 - 15:30 | Link to Comment The Big Ching-aso
The Big Ching-aso's picture

 

 

If you're a depositor this could mean your interest rate ramps up another .001% through 2014.   All's well.

Tue, 03/13/2012 - 15:26 | Link to Comment HD
HD's picture

Mittens. Love it.

Tue, 03/13/2012 - 15:15 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

JPM's take:  raise div; authorize share buyback.

Ain't life grand!

Tue, 03/13/2012 - 15:17 | Link to Comment Sudden Debt
Sudden Debt's picture

It was 2007, 2008 and all banks where buying back shares for a reason...

Tue, 03/13/2012 - 15:19 | Link to Comment Bastiat
Bastiat's picture

Bernanke:  "Le Bourse? C'est moi!"

Tue, 03/13/2012 - 15:22 | Link to Comment Sudden Debt
Sudden Debt's picture

"Ceci n'est pas un dollar"

Tue, 03/13/2012 - 15:13 | Link to Comment Everybodys All ...
Everybodys All American's picture

it's as if they saw the FOMC statement days ago ...

Tue, 03/13/2012 - 15:14 | Link to Comment Al Huxley
Al Huxley's picture

or wrote it themselves.

Tue, 03/13/2012 - 15:15 | Link to Comment Sudden Debt
Sudden Debt's picture

Minority reporT kind of stuff?

Tue, 03/13/2012 - 15:13 | Link to Comment kito
kito's picture

anybody else starting to understand no qe3 = no gold 2000?

Tue, 03/13/2012 - 15:18 | Link to Comment fonzannoon
fonzannoon's picture

it's the part about the market running like a steam engine that I think is confusing Kito

Tue, 03/13/2012 - 15:35 | Link to Comment kito
kito's picture

confusing to who? i dont see the stock market as particularly relevant to gold price movement. its all about what the fed does. gold down over 30 as we speak. its simple.....

Tue, 03/13/2012 - 15:43 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Wake me when it goes back under $400, which is where the dollar average on my holdings is.  Hey, look the market is almost back to where is was in 2008.

Tue, 03/13/2012 - 16:01 | Link to Comment fonzannoon
fonzannoon's picture

I don't see the price of gold particulary relevant to much because outside of the people on this site, no one owns it. Those that do ain't selling. This site has been warning for months that the idea of QE going away would be very market negative.

Tue, 03/13/2012 - 15:13 | Link to Comment wee-weed up
wee-weed up's picture

Baghdad Bill

Tue, 03/13/2012 - 15:24 | Link to Comment dr.charlemagne
dr.charlemagne's picture

Bagdad Ben

Tue, 03/13/2012 - 15:14 | Link to Comment Sudden Debt
Sudden Debt's picture

If you can't trust the FED or goldman sachs, now who can you trust right?

Tue, 03/13/2012 - 15:14 | Link to Comment Al Huxley
Al Huxley's picture

How long until they punt Lacker?  Or is he the token dissenting voice?  Do they really need that nowadays, now that they've dropped all pretenses about meddling in the markets?

Tue, 03/13/2012 - 15:28 | Link to Comment Dr. Engali
Dr. Engali's picture

He is a token. Nothing more.

Tue, 03/13/2012 - 15:14 | Link to Comment AmazingLarry
AmazingLarry's picture

Have YOU bought your DJSPXAPPL yet?!!? Nuttin but green candles all the way to salvation.

Tue, 03/13/2012 - 15:16 | Link to Comment Al Huxley
Al Huxley's picture

OK, I'm putting an end to this right now - going all in on AAPL short-dated ATM calls, if that doesn't reverse this market, nothing will.

Tue, 03/13/2012 - 15:18 | Link to Comment Dr. Engali
Dr. Engali's picture

I'm thinkng the same thing.

Tue, 03/13/2012 - 15:23 | Link to Comment Sudden Debt
Sudden Debt's picture

16 march 250$ calls?

Tue, 03/13/2012 - 15:17 | Link to Comment Dr. Engali
Dr. Engali's picture

Time to throw in the towel on this one way market.

Tue, 03/13/2012 - 15:17 | Link to Comment Chappy
Chappy's picture

No QE, dollar down, inflation up, PM's down, what is driving this market apeshit up right now?

Tue, 03/13/2012 - 15:17 | Link to Comment ss123
ss123's picture

How's housing doing?

Tue, 03/13/2012 - 15:19 | Link to Comment Al Huxley
Al Huxley's picture

Housing is so 2006 - get with the times, join the iBubble.

Tue, 03/13/2012 - 15:18 | Link to Comment Aductor
Aductor's picture

The new normal: Inverted flash-crash. So tradeable - if you can front-run!

Tue, 03/13/2012 - 15:18 | Link to Comment LongSoupLine
LongSoupLine's picture

It's fucking over...here comes the blow off top.  DOW 100,000 by fucking Friday!

Tue, 03/13/2012 - 15:19 | Link to Comment Rip van Wrinkle
Rip van Wrinkle's picture

Is that the same Fed that said house prices had never fallen in the US? The same Fed that said sub-prime is contained?

 

Oh, OK, that Fed.

Tue, 03/13/2012 - 15:20 | Link to Comment Yen Cross
Yen Cross's picture

 When irrationality sets in, a change in course is imminent!

Tue, 03/13/2012 - 15:21 | Link to Comment Ted Baker
Ted Baker's picture

QE ON THE CARDS - MID APRIL 2012 FIRST HINT WILL BE RELEASED 

Tue, 03/13/2012 - 15:22 | Link to Comment Frank N. Beans
Frank N. Beans's picture

what the...?!?!

 

Tue, 03/13/2012 - 15:25 | Link to Comment HD
HD's picture

"All is well"

  Thank God. I was getting worried. And here I was thinking that the market is broken and manipulated. Silly me.  I was convinced that the market is obsessed with QE not just because it's easy money, but because it is now the only money. Imagine I was so stupid that I believed that massive money printing by central banks around the world (who have eased 75 times in the past few years) has anything to do with soaring food and fuel prices.

I was blind not to realize that no jobs, no growth, and sovereign defaults would not equal a parabolic bull market.

All is indeed well. I'll move along now. Nothing to see.

 

Tue, 03/13/2012 - 15:28 | Link to Comment e-man
e-man's picture

This should end well.  Get the popcorn ready.

Tue, 03/13/2012 - 15:46 | Link to Comment ss123
ss123's picture

What clown on this board is junking good posts? Someone from the Fed?

Tue, 03/13/2012 - 15:48 | Link to Comment ivars
ivars's picture

Today is exactly one year since my long term silver spot price prediction chart was created and published on March 13th, 2011, here:

http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&st=0&sk=t&sd=a&sta...

Disregard most of the text, please, except advice for silver buying in the end:

[quote]So, keep silver, but You can buy or repurchase it cheaper during 2011-early 2012 than now. [/quote]

I will take the opportunity given by this anniversary to analyze the charts accuracy during and over one year.

One year ago, on Friday, March 11, 2011, Silver closing spot price was 35,9USD/Oz. In my chart on March 13,2011 I predicted that Silver closing spot price on March 13th, 2012 will be 32,5 USD/oz. Today it is 33,2 as I write. So the accuracy of this END-to-END prediction over one year period is about 2 %.

Here You can see the shorter term part of the same chart ( red color) with comparison to actual silver spot prices over the year period. I would like to suggest what would have been stacker actions he/she would have followed the chart:

http://farm8.staticflickr.com/7204/6777724090_40679067e1_o.png

1) He/she  would never had bought silver above 32,5 USD but waited until it falls below it-except if he wanted to make short term profit on the peaks and troughs in April and August-September by going long before the peak and short at or after the peak.

2) He/she would have bought like hell in October 2011 when closing price was in the range 30-32

3) He/she would have been happily surprised by drop in December -January 2012 and buying with all his money when price went even below 30 USD

4) He/she would have never fallen into traps of April , August-September, October -November and February 2012 excitement and would not have bought above 32,5 -sold may be to make profit and bough back later.

Of course, no one is able to believe in any chart so much, especially from an unknown source, but some reliance on it after it had proved quite accurate ( don't by above 32,5) would have helped after September crash.

But now the scary part comes to test the chart- the fast raise and drop in silver which according to original chart should start already on April 1st 2012, and reach peak by October 2012, OR, according to the same chart that was little bit tuned (green)  in October 17th, 2011- slower and later ( from mid June 2012, with a real sharp rise starting mid September, double top November-December 2012).

http://farm7.static.flickr.com/6234/6280601222_40413db4b9_o.jpg

From both charts, I would say start to believe its going to hit 60-70 in 2012  once its over 45-50  But there will be a crash again, so buying above 45-50 without intent to sell at the peak is not advisable.

Can't wait to see what will happen. I do not trade, but have bought some physical gold to test own charting. If I am as lucky as usual in financial matters, I will loose money. Hope that helps.

All my prediction charts are in one place here:

http://www.tfmetalsreport.com/forum/2814/ivars-charts

Tue, 03/13/2012 - 19:08 | Link to Comment zebrasquid
zebrasquid's picture

They can hide, but they can't run...

Tue, 03/13/2012 - 21:22 | Link to Comment cnhedge
Do NOT follow this link or you will be banned from the site!