Barclays Plc and BNP Paribas SA think the Fed will hike on September 21.
Even more curious, Barclays is based in London, and BNP Paribas is headquartered in Paris.
Is some sort of FX or interest rate fix in?
Market-Defying Call
Please consider Two of Fed’s Own Primary Dealers Warn Shock Hike Awaits Markets.
There’s uncommon dissent in the ranks of the Federal Reserve’s primary dealers over the central bank’s interest-rate decision this week.
Two of the Fed’s 23 preferred bond-trading partners — Barclays Plc and BNP Paribas SA — are betting against their peers and the bond market by forecasting officials will raise rates Wednesday. It’s the first time more than one dealer has gone against the consensus during the week of a policy meeting since last September, data compiled by Bloomberg show. Economists at both banks say traders have too steeply discounted officials’ intent to hike after the Fed has remained on hold for longer than expected.
Barclays had forecast a rate hike at the Fed’s June meeting until a dismal May jobs report at the beginning of that month. This is the first time the bank has called for a Fed increase through the week of an FOMC meeting since December, said Rob Martin, senior U.S. economist at Barclays.
“We’re not the crazy house — this is the first time we’ve been so far out of consensus on the view,” Martin said. “We’ve kept our conviction on September because we think that’s what the FOMC has communicated to us — that’s what we think the chair and the vice chairman were talking about at Jackson Hole.”
Crazy House
Given Barclays has a history of bad Fed hike calls, the most likely explanation is they made another one.
Humorous December 2015 Flashback
StockCats Posted a string of these …
Speaking of strings ….
String of Bad Economic Reports
- September 15: Retail Sales Unexpectedly Dip 0.3% – Weakness Not Contained to Autos
- September 15: PPI Synopsis: Final Demand for Goods -0.4%, Food Prices Down, Obamacare Up
- September 15: Collision Course: Motor Vehicle Production +0.5%, Motor Vehicle Sales -4.4% Year-Over-Year
- September 16: Real Hourly Earnings Decrease 0.1%, Real Weekly Earnings Drop 0.4%, Hooray!
- September 16: Good News For Inflationists: Medical Costs and Rent Surge; Mini-Stagflation Coming Up?
- September 20:Housing Starts Down 5.4 Percent: Bloomberg Says “Not as Weak as it Looks”
For sure the Fed wanted to hike. But…
I cast my lot with the consensus.
Mike “Mish” Shedlock
The likelihood of a rate hike tomorrow is a par with a driverless car parked in my garage during the course of the remainder of my lifetime.
BWHAHAHAHAHA
Ba-zingo !!!
‘Dumb’ has a new home…..
I wish the Fed would take a hike.
I BET THAT FED HIKES TOMORROW BASED ON A NON-ECONOMIC ANALYSIS .
http://www.salientpartners.com/epsilon-theory/essence-of-decision/
I think a lot of the animosity that Obama has seen overseas this year is due to the hike. They do it again and it’s really gonna lean on the other nations. Hike tomorrow? I dunno about that.
I am not saying they will raise “hike” rates tomorrow but I think it is very possible based on what has been written by journalists on what the Fed members have said about rate hikes. It appears there are 4 or 5 who want to hike rates and 2 or three who don’t want a rate hike. If the majority wins and what has been written is true, expect a rate hike. (Please don’t execute me if they don’t) it’s just possible they might, especially if it looks like D. J. Trump might win the presidency. If D. J. wins this country should start running as a business, which it is. THE UNITED STATES OF AMERICA a corporation since 1871. I really don’t think the constitution means “squat” any more. It is a big facade and hardly anyone knows it.
The constitution is alive and well today, As a matter of fact, they added a new amendment to it in 2001… the Patriot Act.
I recently saw a chart of US interest rates dating back to 1830. We have seen three episodes of minimum interest rates since then. Never reaching the zero lower bound but the long smooth circular arced bottom in each case looks similar to ours now. The extremum is in each case reasonably brief. Previous minima have not dragged sideways but rather followed a circular arc back up. If our experience is different it will be an outlier. History suggests a long slow deliberate increase in rates will begin right about now.
You couldn’t have the talent of bogdanovich in your wettest dreams, dude
I’ve never had a troll before. My first troll. Wow. Cool.
It’s only a part-time troll. Not enough hours to qualify for Obamacare.
What an obscure thing to troll about!
“History suggests a long slow deliberate increase in rates will begin right about now.”
I wouldn’t count on that.
There conceivably could be a hike today or in December … but US will see NIRP before any sustained rate hikes.
Last week Bernanke gave a speech laying the groundwork for NIRP if US enters a recession. Current “expansion” is greater than 7 years. Inventories / Sales at recessionary level. Business cycle OVER.
Bingo.
We are rapidly approaching the endpoint of a global, fiat-debt-money system.
Never been there before, so prior data back to 1830 is completely irrelevant.
In 1994 the Fed hiked with only 22% probability a week out. The result was a bond market panic and eventually the bankruptcy of Orange County and the Mexican crisis. Currently odds are 18%. Expect a yuan crisis if they hike.
Aside from stupidity, the best explanation for a hike is Yellen thinks Hillary will lose, and expects Trump will fire her. Hiking rates now makes Trump happy because it gives him a landslide victory in November.
Do you really think Janet is pragmatic enough to make decisions like that? She seems a true believer to me.
Does Janet actually make the decisions she announces?
Bill gross is stating 50% chance
Gross?
Early 2011 he “shorted” treasuries
Dope
Early 2015 German 10yr bund (yield fell to around 1%) he said – and I quote – “The short of a lifetime”
Yield went negative
Dope
Dont’ wet yourself, Mish. I know you can’t wait to get all that good financial advice and maybe an honorary degree from Trump University! (Oh, I forgot, it is defunct). Oh yeah, and Obama is so terrible, but this derp and you got it all figured out. Get over yourself, dude.
“Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much.”
Luke 16:10
My theory stands for now- they wanted people to believe a hike was coming so that the market would relief-rally strong when they didn’t hike. Yellen wants the S&P500 at 2400 in late October and early November, but she can’t lower rates back to zero, nor can she restart QE until after the election. Given her goal, what she is doing is her best option.
Her best option … Emulating Lucy holding the football for Charlie Brown?
Nobody expects her to ever raise rates. While the consequences of those actions would improve the world economy significantly, her precious stock market will drop a lot and bond costs will rise towards more historical levels. She will look like a fool and the politicians who employ her would ridicule her forever. Government is intended to be the gift that never stops giving to those who are connected. She is a means of wealth transfer from you and me to those who are at the very top. It would be more likely that Hillary goes honest and confesses some transgressions than the Fed raises rates any time soon. Hillary is expendable. Current Fed policy is not.
Serious question: What is the point of being “data dependent” when you control the data and you just do data manipulation to justify the outcome you want to reach?
Everything is so warped at this point. Endless amounts of stats used to say that rates must stay low. While this is happening the president is running around cheering about the wonderful economy and the great job he’s done. We now live in the twilight zone.
The consensus among the rank and file in the Washington DC area is almost everyone is rooting for Hillary. They’re afraid if Trump is elected, they’ll lose their easy gov’t jobs. I suspect the FED is thinking the same. I would be shocked if the gov’t did anything that might jeopardize a Hillary win. Normally, DC and Maryland go dem while Northern Virginia goes pub. The reason is Maryland and DC have predominately non defense gov’t jobs and NoVa has defense gov’t jobs. Typically pubs are good for defense and vice versa. But in this election, Hillary seems to be the favorite in the entire area because she’s a war monger.
The hikes will start when:
[1] Trump wins in November — in an after the fact establishment strike
[2] If Trump looks like he is going to win — in a preemptive establishment strike The October Surprise)
The result will be a crash in the equity markets which the establishment will blame on Trump — or, “the markets ‘concern’ with Trump and his policies”
Book It!
If the Fed waits for the (fraudulent) data to hike rates, then most certainly pensions and insurance funds will hemorage, not to mention responsible savers. The dollars going higher regardless, why not rip off the band-aid and do the right thing. Maybe some of the civil unrest could be lessened when public pensions try to squeeze the last drop of blood from the private sector. I’m short going into an Oct low.
It certainly is a bind. If pensions continue to underperform, taxes will be raised. The trick is to blame the tax increases on the people who haven’t won political office yet rather than the incumbents, but I think that trick has been played beyond its usefulness.
It certainly speaks to the extent of leverage that a piddly 25 basis point hike is seen as a plague of economic locusts. If the Fed were making piddly hikes on a bi-monthly basis one could make the argument that its nickel-and-diming the market to death. (Must resist the urge to use the nickel-and-Dimon pun.) But there is so much hemming and hawing that the Fed’s inaction is more like fiddling while Rome burns.
“If”?…
They will NOT hike.
They will TALK about hiking in the future.
They will lose a little more of what little “credibility” they have left.
Rinse.
Repeat.
FED’s Lacker: Four Rate Hikes In 2016 Would Be ‘Gradual’
So gradual that nobody can see them.
V-e-h-e-e-e-r-y gradua……..kzzzzzhhhnnnngggkzzzzzzz….huh-whuh?………kzzzzzz……….
Zero Hedge noted that Larry Summers just had an 11 message Tweetstorm against Yellen raising the rate.
Suppose they did hike, what difference does 1/4 pt make? People are (have) figuring out CBs are irrelevant because the policies clearly don’t work, haven’t worked. They didn’t make the sun go up and down; so it doesn’t actually matter what the CBs do. There is little to be gained by examining whatever they say. They can’t fix anything and people are losing confidence. They’ve got a choice between taking less pain now or more pain maybe later. They’re trapped. Everyone is just watching to see what everyone else is going to do. This is the only thing worth thinking about.