JPM On The FOMC Announcement: The First Dovish Dissent?

Tyler Durden's picture

With less than an hour until the 12:30pm FOMC announcement, the time to place your bets is here. The market, up almost 2% already has, and has ignored some truly horrible news out of Europe, betting that the Fed will do something, anything, to boost the global recovery. We are skeptical. Which troubles us because so is everyone else. Below we present the opinion of JPM's Michael Feroli who is also in the same boat: expects no action, yet in that case he anticipates the first Dovish dissent since the GFC (everyone knows the three Hawks on the FOMC are very much mute and will continue to dissent until the Fed actually hikes rates). As a result one thing the Chairsatan may relent to, is an extension in the ZIRP rate guidance from mid-2013 to late 2013. Regardless, we will cover the announcement, we hope the FOMC site does not crash, and as always fade the first through fifth kneejerk market responses to the statement.

In recent weeks the doves on the FOMC have become more vocal. If the Committee takes no action today -- which is our expectation -- this raises the risk that we could see a dovish dissent, which would be the first since Rosengren did so in late 2007. The most likely candidate for such a move is Evans. Next in line would be Tarullo, though it is rarer for Governors to dissent than for Reserve Bank Presidents to do so. Raskin has also expressed some strong dovish views lately, though a dissent from her seems a long shot. Dudley and Yellen may be sympathetic to the motives for a dovish dissent, though their leadership position will almost surely prevent them from actually casting a dissent. All in, five of the ten voting members might at least sympathize with a dovish dissent; when you count the three hawks, that leaves only Bernanke and Duke in the center.


If the Chairman wanted to throw the doves a bone (block that metaphor!) one simple action would be to extend the mid-2013 rate guidance to late 2013 -- this wouldn't be much but at least it would convey a sense that the Committee is not content with the employment outlook. Another outcome that could prevent a dovish dissent would be if there was a sense that the communications sub-committee were making progress in moving the Fed rate guidance in a way that might eventually be more in line with Evans' trigger strategy. In any event, hawkish dissents from Fisher or Plosser are still the more likely outcome, but it wouldn't be a complete surprise to see a dovish dissent.

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xPat's picture

Did they change the time or is this a typo? I had 12:30 for the FOMC announcement and 2:15 for Bernanke's press conf...


rcintc's picture

You are starts to tank @ 2:16pm.

trav7777's picture

I suppose actual honesty is not to be expected, eh?

Deadpool's picture

must short morning's rally, no?

DIEKeynesianEconomics's picture

i did a small bit at the peak. mostly dry though

paratrooper325's picture

I expect absolutely nothing out of these crooks. Tank the market to the ground baby!

Divided States of America's picture

Tell this roundtable of fuckers to stop using the excuse of resuscitating a patient that has been dead for the past few years (the economy) in order to keep funnelling money into the hands of the banking elites.

disabledvet's picture

I agree. "At 2:15 today Europe was pronounced dead. So noted in the ships log." "Captain!"..."What is it Spock?" "I'm detecting a gaseous annomaly in sector 542." ..."OK! Let's go investigate! Warp speed in 3...2...1...

PicassoInActions's picture

any clues where is EURO or JPY going? any1?

qussl3's picture

Well in the looooooong run..........

PicassoInActions's picture

i need next 15-30 min, in the long run we all know ( or at leaqst have an educated guess)

partimer1's picture

what about the large-scale asset buying with targeting the GDP growth?  a big surprise to everyone?

junkyardjack's picture

The surprise for that announcement would be the people overthrowing the government, it'd only be a surprise for the people in government 

junkyardjack's picture

Let's hope that ZH doesn't crash.  Then I'm stuck trying to google it or wait for Yahoo Finance to post up the good news

bernorange's picture

I expect that they will keep the QE option on the table, but not do much at this time.

devo's picture

Printing money does no good when it can't get into the pipeline. QE3 would, therefore, be pointless. The Fed cannot justify it, and Republicans would hammer them for it. Not going to happen. Status quo today.

Tsar Pointless's picture

QE3 would, therefore, be pointless.

Yes? What can I do for you?

Pointless you say? Well, then, by all means - I think they should do QE3.

mainuh1's picture

Pump monkeys must be trading today. They will lose their shirts eventually - look out for falling stock brokers on Wall St.

junkyardjack's picture

They'll be on the free food line in Zuccotti Park

disabledvet's picture

With the protesters? What's that mean when the OWS is suddenly occupied by Wall Street as well?

dcb's picture

sometimes I feel you need an editor:

"betting that the Fed will do something, anything, to boost the global recovery"

should correctly read:

betting that the Fed will do something, anything, to boost  global asset prices and get money to the banks via the back door.

It should be clear to any and all by now, esp zerohedge readers the fed programs are about two things, boosting asset prices, and getting money to the banks. On any other metric they have failed. since the fed refuses to get involved in the screwed up transmission of monetary policy and isn't willing to make sure the banks can't game the system and increase lending, no surprise it ain't working. since we have now done it three plus times I conclude it was never the purpose (to help the economy) but to prop up insolvent institutions and cover up what a bunch of screw ups they were in their regulatory over sight duties

devo's picture

I think you're right, but I think they need to be able to justify it under intensifying scrutiny. I don't see how they do that in this case given the Dow is at a healthy level and money supply is not the issue.

obthedgehog's picture

dcb I think you win ZeroHedge today.

The FED's job is *always* to support the banks (or rather the correct, connected ones).  Supporting the PTB in government and elsewhere is second.

The giant QEs were giant bricks meant to fill hole in banks' asset sheets to they 'make' their regulatory requirements.  In interest payments were essentially direct transfers to the banks, though they had the side effect of keeping that money from being lent out.

There is already enough base money in banks to create H-bomb-level inflation if lending gets going in any meaningful way.  Further QE is not needed.

The FED says it can absorb those giant bricks from the banks' balance sheets whenever they want, which may or may not be correct.  If anyone could describe possible mechanisms I'd love to hear them.

You half have to consider that the horrible regulatory moves the government is making to destroy the economy have as much to do with disincentivizing lending as it has to do with just being docrinaire socialist, mercantilist, digestive system output ports.

But that's just my opinion.  I could be wrong.

disabledvet's picture

They appeared to have succeeded beyond anything I could possibly imagine. Onto "European banking collapse Thursday!"

JW n FL's picture



Cheap or more accurately.. Free PLUS! Tax Benefit monies to the credit worthy.. will not be ending any time soon.

To Many of the Players are making too much money.

The Wealth Divide between the top 400 people in America verse the bottom 150 million is going to grow and grow and grow until the scale of the disparity is such a wide divide that people (broadly) will be unable to comprehend the scope and scale.

20% wealth growth by 2016.. equates to how much printing?

the algo's have the exact TSY's sale schedule and the exact price.. other than created singular events to create vol.. what else is needed to not only front run on the sub penny level.. but to shape the nature of the markets.

People are picking stocks based on fundamentals.. not based on who the FED is buying to prop up or use to push the market higher.

the top down view, plugging in the FED's purchase schedule.. is the perfect run for making money.

it is market timing in the future based on the FED's Purchases..

this is beyond a fixed market, it is an engineered market.. and either you are in the know or you are out of the money, period.

Treasury Borrowing Advisory Committee of the Securities Industry and Financial Markets Association


trav7777's picture

organized labor power brought this down before.

It won't be brought down by government as they are all taken care of.  We're creating the next crop of oligarchs and moving to banana republic status where a few families own everything.

Saxxon's picture

The Fed is the Enforcing Arm of the Lamprey Banking System, which is 'in place' merely to suck the country and its people dry.

Sometimes we need to think in different categories.  From a biological standpoint, what else IS the U.S. Banking System, as it now exists, other than a symbiotic, bloodsucking, burrowing worm on the body politic?

And nearly every single elected official serves that fat white worm.

Optimusprime's picture

Correction:  It is a parasitic worm whose apologists keep trying to convince everyone is symbiotic.


Fixed it for you.

Conax's picture

Broken record report, at precisely 12:33 Eastern the massive shorting of silver began in earnest.

From a morning average of a few hundred a minute to several thousands a minute. Then I drop by ZH and see some FOMC announcement scheduled for 12:30. Ain't free markets grand?

Netdania, set to 1 minute tics, volume window on, see the stupid shark's teeth for yourself.