Posted by sbaxman111 on 21st of Sep 2015 at 11:10 pm
What could be influencing the Fed to back off on interest rate
hikes (and even keep one Fed member wanting to take rates
negative)? Take a look at the new decline in their long-term growth
projections...
Yellen made it simple for the rest of the year: no hike with
inflation below 2%. It is mathematically impossible to get to 2%
without oil over $80 almost immediately. And the Fed has been
consistently 1-2% too high in GDP estimates since 2008. They are
still too high.
FOMC
Posted by sbaxman111 on 21st of Sep 2015 at 11:10 pm
What could be influencing the Fed to back off on interest rate hikes (and even keep one Fed member wanting to take rates negative)? Take a look at the new decline in their long-term growth projections...
(@SoberLook)
J.P. Morgan thinks that the Fed has now "moved the goalposts"...
The path forward for stocks just became a lot less clear. The monthly jobs reports, heretofore considered the preeminent eco report, were just downgraded in importance as Yellen implied the Fed was now comfortable allowing the UR to undershoot their objective. “Global economic and financial developments” appears to be the new policy gating factor but that amorphous and vague phrase is much harder for investors to assess (esp. since its difficult to argue that EM/China growth trends deviated dramatically from their months/years-long deceleration path in Aug and thus the Fed really appears to be just trying to placate financial markets). If the Fed found it difficult to hike in Sept., their decision won’t get any easier later this year.
(JPMorgan)
Mr. Dillian has called it all year...
(TheDailyDirtnap)
So now that we are completely uncertain as to the future Fed direction, what’s next? Goldman thinks higher correlations and a more difficult alpha generating environment...
...market uncertainty is likely to remain high as investors refocus on the timing of a “first” Fed hike, China’s economic slowdown, and oil price volatility. The uncertain market environment ensures that macro forces will stay top of mind for fund managers. Unfortunately, elevated macro risks mean a challenging stockpicking environment as macro forces outweigh stock fundamentals. During the last month, stock correlations skyrocketed as indiscriminate macro pressures pummeled the S&P 500 index and weighed on the stock-picking environment. Leaving few stocks unscathed, recent equity turbulence drove S&P 500 stock correlations from 30% to 56%, the highest levels since the 2011 European crisis.
(Goldman Sachs)
it's not dovish or hawkish, it's chickenish!
Posted by tsurplus on 22nd of Sep 2015 at 09:34 am
Yellen made it simple for
Posted by a_l_ on 22nd of Sep 2015 at 12:50 am
Yellen made it simple for the rest of the year: no hike with inflation below 2%. It is mathematically impossible to get to 2% without oil over $80 almost immediately. And the Fed has been consistently 1-2% too high in GDP estimates since 2008. They are still too high.
The 'Just Do It' -
Posted by a_l_ on 22nd of Sep 2015 at 12:52 am
The 'Just Do It' - what harm can it do crowd doesn't know what harm it can do (recession trigger).