The Big Fed Thread

[R K]

http://www.brookings.edu/blogs/ben-bernanke/posts/2016/03/24-rate-pegs#.VvPuCwHHg40.twitter

Ben on rate targetting along the curve, either on its own or as a complement to other policies.

[R K]

I can do better. Here is a chart.

Not sure what that is showing apart from that following price dislocations, 21-24 August for instance, 3 month and 6 month returns are +ve and above normal. In fact since August 24th every month has closed higher than August 24th. This is common to other periods also. 1987/2008/2011 etc

Link please?

Edited March 25, 2016 by R K

[interestrateripoff]

Isis ordering people to pay fines in US dollars as currency fails

[interestrateripoff]

U.S. GDP Rose 1.4% In Final Estimat

While the final revision to Q4 2015 GDP was so irrelevant it was released on a holiday when every US-based market is closed, even the futures, it is nonetheless notable that according to the BEA in the final quarter of 2015 US GDP grew 1.4%, up from the 1.0% previously reported, and higher than the 1.0% consensus estimate matching the highest Q4 GDP forecast. The final Q4 GDP print was still well below the 2.0% annualized GDP growth reported in Q3.

[interestrateripoff]

For The Average American, Owning A Home Is Increasingly Unaffordable

Home prices are rising faster than wages in most of the United States, making homeownership increasingly difficult for average Americans in some of the most populous areas of the country, according to a report released on Thursday. The report found that home price growth exceeded wage growth in nearly two thirds of the nation's housing markets so far this year, with urban centers like San Francisco and New York City among the least affordable.

[zugzwang]

Weve had a sustained recovery though only US has really done this in any meaningful way. UK has had fiscal tightening of course. EZ austerity was (is) blowing the entire union apart despite Draghi's late/best efforts.

That'll explain the blind panic at the Fed, World Bank, IMF over the world falling back into recession...

No, Keynesian prescriptions were successful in the 1940s and 50s, in conditions of capital scarcity, when civilisation needed urgently to be rebuilt. Today, as in the 1970s, in conditions of capital abundance, Keynesianism simply does not work.

[interestrateripoff]

Healthcare Is About To Surpass Housing As The Biggest Source Of American "Growth"

What was most troubling in yesterday's GDP report is that the second highest spending category making up the GDP calculation, Healthcare at $1.9 trillion, has been soaring in recent years, more than offsetting the housing weakness, and as the chart below shows, the US economy is within 2-3 quarters of the moment when outlays on healthcare (and Obamacare) will surpass spending on Housing.

[interestrateripoff]

The "Restaurant Recovery" Is Over: Casual Dining Sales Tumble For Fourth Straight Month

The latest channel checks show that same store sales trends at America's casual dining restaurants - those which cater to the vast majority of the US middle class - have suffered a fourth consecutive month of declines, something not observed since the first financial crisis, sliding a whopping 3% in March.

[jiltedjen]

Healthcare Is About To Surpass Housing As The Biggest Source Of American "Growth"

What was most troubling in yesterday's GDP report is that the second highest spending category making up the GDP calculation, Healthcare at $1.9 trillion, has been soaring in recent years, more than offsetting the housing weakness, and as the chart below shows, the US economy is within 2-3 quarters of the moment when outlays on healthcare (and Obamacare) will surpass spending on Housing.

With so much money going into healthcare will this mean lots of medical breakthroughs? Or is it just profiteering?

[rollover]

The Fed Fails to Connect the Dots

That's the correct thinking behind the Federal Reserve's forward guidance -- and it's why one aspect of its approach needs to change. The Fed regularly publishes a closely-watched "dot plot" of interest-rate projections. Even if correctly understood, this conveys little or no useful information. The dot plot shows what individual Fed officials believe the short-term interest rate ought to be in the future. Least of all are the plots meant to express any commitment to set certain rates. Nonetheless, when the dot plot changes, Fed policy is deemed to have changed, and the central bank's credibility gets called into question.

[R K]

Add your own DOOM narrative

St. Louis Fed ‏@stlouisfed

See how the miles driven by Americans has climbed over the past two years http://******/1MoiKog

[TheCountOfNowhere]

The Fed Fails to Connect the Dots

That's the correct thinking behind the Federal Reserve's forward guidance -- and it's why one aspect of its approach needs to change. The Fed regularly publishes a closely-watched "dot plot" of interest-rate projections. Even if correctly understood, this conveys little or no useful information. The dot plot shows what individual Fed officials believe the short-term interest rate ought to be in the future. Least of all are the plots meant to express any commitment to set certain rates. Nonetheless, when the dot plot changes, Fed policy is deemed to have changed, and the central bank's credibility gets called into question.

Head in the sand time

[onlyme2]

Add your own DOOM narrative

St. Louis Fed ‏@stlouisfed

See how the miles driven by Americans has climbed over the past two years http://******/1MoiKog

Not surprising considering the fall in forecourt petrol prices.

And the huge number of new cars on poor credit loans.

[TheCountOfNowhere]

Not surprising considering the fall in forecourt petrol prices.

And the huge number of new cars on poor credit loans.

Or people having to travel to get jobs. Edited March 28, 2016 by TheCountOfNowhere

[onlyme2]

Or people having to travel to get jobs.

Or having to travel to get to their three craply paid part time jobs to make ends meet.

[TheCountOfNowhere]

Or having to travel to get to their three craply paid part time jobs to make ends meet.

Impossible to be tell. But it does show how actual deflation helps the 99%

[interestrateripoff]

Weak US consumer spending expected to delay interest rate rise

[interestrateripoff]

Q1 GDP Crashes To 0.6%: Latest Atlanta Fed Estimate

Earlier today we said that following today's abysmal January spending data revision, "the Atlanta Fed will have no choice but to revise its Q1 "nowcast" to 1.0% or even lower, which would make the first quarter the lowest quarter since the "polar vortex" impacted Q1 of 2015, and the third worst GDP quarter since Q4 2012. It means one-third of already low Q1 GDP growth has just been wiped away."

It was "even lower."

All that driving and no spending......

[interestrateripoff]

Dallas Fed Respondent Sums It Up: "Anyone Saying We're Not In Recession Is Peddling Fiction"

Headlines will crow of the seasonally-adjusted 'beat' of expectations for the Dallas Fed survey (-13.6 vs -25.8 exp) but this is the 15th month in contraction (below 0) - something only seen in recession. Scratching below the surface we see employees, workweek, and capex all in contraction and forward expectations for new orders and employment tumbled. Perhaps that reality is what drove one respondent to rage, "anyone who says the economy is not in recession is peddling fiction."

[interestrateripoff]

23% Of Americans In Their Prime Working Years Are Unemployed

As this reality-check data shows, we never really had any sort of meaningful “economic recovery”, and now we have entered the early phases of the next major downturn. So where do we go from here? Unfortunately, our debt-fueled prosperity has provided us with a massively inflated standard of living that is not even close to sustainable. As this bubble bursts, the economic pain is going to be absolutely unprecedented.

[zugzwang]

For a majority of Americans recession never left the table.

[GreenDevil]

Weak US consumer spending expected to delay interest rate rise

Are the banksters thick?

Dont they know the basic fact that if they raise rates they will get things going ?

[interestrateripoff]

Fed's Kaplan says central bank should raise rates gradually and cautiously

WASHINGTON Dallas Federal Reserve President Robert Kaplan said on Tuesday he expects the U.S. economy to prove resilient this year but that the nation's central bank should proceed gradually and cautiously in raising rates.

[GreenDevil]

There it is, Yellens testimony today that the rate hike was a mistake in todays announcement.

ZIRP, NIRP to infinity.

[TheCountOfNowhere]

There it is, Yellens testimony today that the rate hike was a mistake in todays announcement.

ZIRP, NIRP to infinity.

In that case, the dollar is toast muxho trouble to come