In a 7-3 vote, the Fed held rates at 25-50 basis points. The FOMC Announcement was no surprise in this corner.
I did expect the Fed would trot out the word vigilance or imminent, or use similar language that would cause one to believe a hike was in the cards for December.
Nope. It was the usual lovey-dovey affair, albeit with three dissents coupled with a pseudo-hawkish warning after the meeting.
Case Strengthens Yet Again
Following the meeting, the Fed stated it “judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives”.
Three Dissents
Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; James Bullard; Stanley Fischer; Jerome H. Powell; and Daniel K. Tarullo. Voting against the action were: Esther L. George, Loretta J. Mester, and Eric Rosengren, each of whom preferred at this meeting to raise the target range for the federal funds rate to 1/2 to 3/4 percent.
Laugh of the Day
Happy Days?
Gold and silver are up. Equities rallied sharply then started to drop in conjunction with bond market fluctuations.
Warning Sign?
In what could be a warning sign, the bond market action is interesting.
- The 2-year treasury note yield is up 3 basis points.
- The 5-year treasury note yield is up 2 basis points.
- The 10-year treasury note yield is up 1 basis point.
- The 30-year bonds yield is nearly flat.
Two-Year Bond Yield
Correlated Markets
Since that snapshot, bonds yields stabilized and equities rallied.
Stock and bonds are moving lock-step together.
Mike “Mish” Shedlock
No FED rate hike ever. Too dangerous to risk it. The whole world has turned into Japan.
Exactly!
However, I do predict there is a 100% chance of a rate hike sometime within the 21st century.
“Since that snapshot, bonds yields stabilized and equities rallied.”
3pm east coast
10yr down 2 bps
30yr down 4 bps
“Case Strengthens Yet Again”
The case has strength-end so much, that the the FED has not raised the rate this year.
Yes, and the economy is great, too. That’s why we’ve had ZIRP for far longer than any other time in history and, yet, they don’t dare end it.
Pay bank $100 and go directly to jail, do not pass go and do not collect $200.
…the Fed stated it “judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives”.
Yellen could not find any evidence of intent and will thus not file rate increases.
Yammering on about what the Fed may or may not do.
Waste
Of
Time
Yammering = rasis.
Rasis
Also found in: Encyclopedia, Wikipedia.
Rha·zes (rä′zēz) or Ra·zi (rä′zē) 865?-925?
Persian physician whose medical writings were a major influence during the Middle Ages.
Bond traders a bit confused.
Not covering short positions, just yet.
As the economy continues to weaken into Q4, and/or a full-blown European banking crisis hits, short-covering galore will produce a nice rally in Treasuries.
In the meantime, I will enjoy the nice gains in Gold and Silver.
I wonder what the Fed does if the vote is tied at 5-5?
Grandma Yellen flips a coin.
“Heads I win; tails you lose”
God how I hate that bitch.
Such a condescending twat.
that she pulled out of her g-string. boom, chicka, bow!
The Fed? They are indeed “out of bullets” and “pushing on a string”. Such division among a group of virtually identical Fed types is rather unusual to say the least, and to me indicates indecision.
These are ‘experts’. They follow models. They almost ALWAYS think and react alike. They concoct and follow data. They never once consider that perhaps the models themselves don’t work…or that perhaps “the market” can never be made to work for anyone, or to fulfill social goals.
They denigrate actual observation and the drawing of logical deductions.
If they actually talked to real, ordinary people, verbally, they’d quickly find that this is not a “recovery” but a continuing slide in living standards stretching out over many years and even decades…
You can only fix what you measure. Living standards aren’t measured.
“You can only fix what you measure. Living standards aren’t measured.”
But families and individuals can certainly sense it. Thus, Trump and Sanders.
Indirectly, and subconsciously, they are. But only as pertaining to those in Fed governors’ immediate circle of acquaintances. As in, high level officials in government and banks.
“a continuing slide in living standards stretching out over many years and even decades…”
Yes, the boiled frog scenario, same as Japan, actually much worse for the proles than a crash with bankruptcies too large to be bailed out which would clean the system of malinvestments as it should have been allowed to be cleaned in 2008. Rather than a crash and relatively quick, fundamentally sustainable recovery, a slow decline with an inevitable crash perhaps well into the future.
But the proles are beginning to notice, resulting in both Trump and Sanders.
As I expected as well.
And now they’ll keep us in suspense until December only to keep rates the same.
Come on, people. We’re grown adults. We should be able to figure out their pattern here.
They know we’re headed into a deep recession. They feel lowering the rates now would only make it worse.
If you have an adjustable mortgage you’re in the cat bird seat.
Just because someone poops on you it doesn’t necessarily mean he’s your enemy. And just because someone pulls you out of the poop it doesn’t necessarily mean he’s your friend. If you’re warm and cozy laying in a pile of poop it’s better to keep your mouth shut.
NO RATE HIKE I KNEW IT ALREADY AS I EXPECTED
NEXT RATE HIKE IN DECEMBER AFTER NOVEMBER PRESIDENTIAL ELECTION AT BEST OR MAYBE IN 2017 ANYWAY IT WILL BE BUSINESS AS USUAL ?STOCK EXCHANGE WILL OPEN AT 9.30 AM AND THERE WILL BE WINNERS AND LOSERS STXX MAKING NEW 52 WEEK HIGHS OTHERS LOWS STXX MAKING 50 DAYS HIGH LONG TEND SHORT TERM TRENDS ETC..THERE WILL BE LEADERS AND LAGGARDS
THE KEY IS TO FIND THE NEXT LEADERS SO BUY THE BEST STXX IN THE STRONGEST SECTORS NOTHING HAS CHANGED FROM THE 1930 S THE TECHNOLOGY HAS PROGRESSED
THERE WILL BE SECTOR ROTATION IN THE FUTURE SO I LIKE TO HAVE A TOP DOWN APPROACH TO KNOW WHERE THE MONEY FLOWS IS POURING DOWN AS INSTITUTIONAL INVESTORS GIVE THE DIRECTION OF THE TREND
LET S SAY IN JANUARY THE FED IS HIKING RATES AND STOCK MARKET CRASHES
THEN WE WILL HAVE A NICE BULLISH MARKET UPTREND TO RIDE
SO IT COULD BE A NICE OPPORTUNITY SO CASH IS KING ALWAYS REACT TO THE TREND
OMG it’s SHOUTING STEPHANE again. I cannot read that, it hurts my eyes.
On expected lines. What can bring this market down? It definitely is not going to be central bankers on their own.
Just follow the money!
When the bond bubble finally pops it will be devastating. Never before do I remember seeing so many predictions of interest rates remaining low forever and a day. Currently, it appears the whole world is trapped in an easy money low-interest rate environment with no way out. There are signs a massive problem is developing and it holds huge economic ramifications and major risk. Many of us think the bond market is a bubble and when it pops it is guaranteed to leave a massive path of destruction in its wake.
The idea that markets are always efficient is a myth manufactured by so-called experts such as Paul Krugman in the ivory towers of academia. This is why many of us are wary and have a problem lending hard earned money out for a long period of time. Rates are based on predictions of future government deficits and events around the world that may or may not unfold as expected. Below is an article delving into why bonds, both corporate and government may result in your financial demise.
http://brucewilds.blogspot.com/2015/12/bond-market-bubble-ending-has-massive.html