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Fed that cried wolf? Rates forecast in doubt...

PRODUCTIVITY SLOWS TO 1.2%...

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#1 Rogerdodger

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Posted 02 February 2017 - 09:02 PM

Fed that cried wolf? Rates forecast in doubt...

 

Practically no one expected the Federal Reserve to do very much at this week's meeting, but it's possible the central bank actually did less.

The Fed did not raise interest rates on Wednesday and gave no indication of when the next hike might happen — virtually a prerequisite for movement on rates. As a result, 2017 is shaping up as another year in which Fed officials' time frame for rate hikes is looking too aggressive.

At least in the market's eyes, there is little chance of a hike in March, and not much likelihood that the Fed will meet the projections at the December meeting that indicated three hikes are on the way this year

 

PRODUCTIVITY SLOWS TO 1.2%...

 

For the year, productivity rose a tiny 0.2 percent. It was the worst showing in five years.


Edited by Rogerdodger, 02 February 2017 - 09:05 PM.


#2 Rogerdodger

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Posted 02 February 2017 - 10:17 PM

Central Banks in a Holding Pattern

A third certainty is that the Central Banks will proceed cautiously and not rush to change existing monetary policies without gaining a clearer understanding of the economic impact of America’s new administration.



#3 Chilidawgz

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Posted 02 February 2017 - 11:54 PM

My thinking is ignore the FED horse manure, watch what the market does on it's own with the 10 year.

 

ten.gif


Anything can happen...what's happening now?
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#4 Data

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Posted 03 February 2017 - 03:21 PM

Fedwatch tool is forecasting a hike in June and December.   That's when the cumulative probabilities for the lower interest rates on the histogram drop below 50 percent.



#5 gm_general

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Posted 03 February 2017 - 04:20 PM

I found this an interesting article:

 

http://www.zerohedge...on-point-coming

 

this chart in particular:

 

Hussman-price-sales-ratio-Jan-17.jpg?res



#6 Data

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Posted 03 February 2017 - 04:51 PM

1995 was the beginning of the QE bubble.   Japan buys US treasuries.  The Fed holds down short-term interest rates.  The BLS changes how it calculates inflation in 1996.



#7 Douglas

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Posted 04 February 2017 - 03:24 AM

Patience, the stock market bubble depends on FED free money. When the border tax kicks in, consumer inflation will spike freaking out Auntie J and the FED. I am convinced FED tightening responding to the border tax inflation bump will be the B-52 black swan, bubble pricking pin you all have been waiting for. The only little problem is figuring out how long from the border tax until it shows up in the CPI. Timing the event horizon for this market crushing black hole swan could be a bit tricky. Of course the BLS could just "adjust" out this inflation like they have every other thing that rises in price enabling the bubble to live on.

Regards,
Douglas