FOMC Forecasts Economic Improvement But Sees Weaker Inflation, Sets Tone For September Rate Hike

With data showing very little sign of the Q2 post-weather bounce that The Fed forecast, and markets quaking in their boots on every 'good' data print, The Fed remains cornered - desperate to hike (to regain some ammo) but needing to lie through their teeth in order to rationalize why...

  • *FED FORECASTS IMPLY TWO QUARTER-POINT RATE INCREASES THIS YEAR
  • *FED SAYS ECONOMY EXPANDING `MODERATELY,' JOB GROWTH PICKED UP
  • *FED REPEATS INTL DEVELOPMENTS TO BE TAKEN INTO ACCOUNT

So the bottom line - The Fed has no idea still, is data-dependent (unless the data disagrees with them), and is now the world's plunge protection team. It seems the IMF's warnings have been ignored.

Pre-FOMC: S&P Futs 2091, 10Y 2.387%, EUR 1.1260, Gold $1178

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Reuters was excited pre-FOMC...

 

Here's what happened after the March FOMC meeting...

 

Since the March FOMC meeting (the last press conference)... The Dow is unchanged, oil and silver and gold are notably higher, bonds worst...

 

And since the last Fed rate hike in June 2006...

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  • *FED REPEATS LIFTOFF HINGES ON ASSESSMENT OF ECONOMIC PROGRESS
  • *FED: GROWTH IN CONSUMER SPENDING MODERATE, HOUSING IMPROVED
  • *FED SAYS LABOR MARKET SLACK HAS `DIMINISHED SOMEWHAT'
  • *FED SAYS ENERGY PRICES STABILIZED, INVESTMENT AND EXPORTS SOFT

 

And here is the redline comparison with April

 

 

 

 

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Given the following charts...

and Janet Yellen's cognitive dissonance on the future economy... This clip seemed appropriate (h/t @Emerald_ip)

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