Posts Tagged ‘data dependent’

Notes From Underground: The San Francisco Fed Says It Ain’t Rocket Science … Again

May 19, 2015

The talking heads in the financial media have a great deal to answer in regards to yesterday’s release of the San Francisco Fed’s Economic Letter by Rudebusch, Wilson and Mahedy in which the three researchers said: “We find  that a second round of seasonal adjustment implies that real GDP growth so far this year appears to have been  substantially stronger than the BEA [Bureau of Economic Analysis] initially reported.”


Notes From Underground: Fed Creates Jobs by Printing `Data Dependent’ T-Shirts

May 11, 2015

Today, CNBC‘s Steve Liesman interviewed San Fran Fed President John Williams. In a swipe at Fed gallows humor, President Williams presented Liesman with a T-Shirt that said the Fed was DATA DEPENDENT. The humor part was Williams’s effort to cut-off Steve Liesman’s well choreographed question which amounts to: “Come on, John, share your inside view about the possibility of a RATE RISE at the next FOMC meeting (just between us, John).” So as to make sure that Liesman understands the consistent answer: It is data dependent. If the FED wants to create some jobs it can send everyone with a bank account a free “Data Dependent” shirt, compliments of their regional Federal Reserve. All sarcasm aside, President Williams’s view puts added importance now to the inflation data on Friday and of course the retail sales input on Wednesday. The consensus on the CORE RETAIL SALES is 0.3% increase so a strong number would be above 0.6%. If the theory of data dependence holds then it should be the SHORT END of the curve that gets sold and here is my reasoning: The 2/10 and 5/30 parts of the yield curve have steepened dramatically during the last two months as the market accepts the fact that the recent bout of weak economic data has pushed the FED further away from raising rates.