Posts Tagged ‘Dovish’

Notes From Underground: When Fed DOVES Coo

September 5, 2017

The FOMC doves were out today. Governor Lael Brainard and Minneapolis Fed President Neel Kashkari weren’t enough to prevent a selloff across global equity markets. The weekend brought louder noises from North Korea as Kim Jong-un revealed that the country had the wherewithal to place a thermonuclear warhead on an ICBM. In an effort to enhance the rhetoric it appears that the state detonated a thermonuclear explosion as radiation levels were elevated and a minor tremor registered on seismographs in the North Asian region. The world is on edge as the United States, China, Russia and the United Nations decide how to deal with the “rogue” nation, an irrational actor in a rationally modeled world. Maybe economics is not the only dismal science?


Notes From Underground: Mario the Magnificent Keeps the Crowd Enthralled

July 23, 2017



Notes From Underground: Oh, Janet, There Is A Santa Claus Rally Brought About By the QE Rain

December 13, 2016

Yes, the day of decision is upon us and everybody is SURE of a 25 basis hike from the FOMC. IF I WAS IN CHARGE–NO, NOT JOSE CANSECO, WHICH WOULD BE MONETARY POLICY ON STEROIDS–I WOULD RAISE RATES 50 BASIS POINTS AND ISSUE A WARNING OF MORE AGGRESSIVE INCREASES TO COME. Alas, I am but ashes and dust. The FED has prepared the market for a certain 25 but here are the things to watch:


Notes From Underground: “Do You Presume To Criticize The Great Oz?!?!” (Or Stanley Fischer)

August 28, 2016

When Janet Yellen delivered her speech on Friday morning the markets reacted to the dovish overtones via buying of SPOOS, GOLD, BONDS and selling the U.S. dollar. The initial action was less muted as the algo headline readers first though Chairwoman’s words mildly HAWKISH, but as key words were measured in context the sense was Yellen was being dovish in not leaning toward a September rate increase. Yellen did give us a significant barometer of data measurement. It seems that 190,000 increase over a three-month moving average is the FED‘s BOGEY. This Friday’s estimate is 180,000, which now puts more pressure on its importance because of September’s FOMC meeting. As usual, Yellen said,”… the economic outlook is uncertain, and so MONETARY POLICY IS NOT ON A PRESET COURSE,” (emphasis mine).


Notes From Underground: Consensus is the Last Refuge of Cowards (Michael Crichton)

April 27, 2016

Today the Fed delivered as expected, leaving rates unchanged and the market conjecturing about the sincerity of the FED’s data dependency (again). Some analysts and algo readers initially thought the FOMC statement was “hawkish” because the FED removed most of the rhetoric about the headwinds of international global and financial developments. I say most because the Fed left in “net exports have been soft.” This is either a concern about the lack of global growth and/or an overly strong U.S. dollar. It is MY OPINION that the Fed removed the language about international financial risks as an offering to the HAWKS as a way to get consensus.


Notes From Underground: Greece, Again? Or Is It Germany Versus France?

July 12, 2015

As discussed ad nauseam, politics is trumping the economics of the Greek drama as the European finance ministers are trying to cut and paste a “bailout” solution that satisfies all parties. In what is being reported as terse discussions taking place in Brussels, the Financial Times reported that German Chancellor Merkel said, “There’s not going to be an agreement at any cost.” This Merkel comment is in direct contravention to Mario Draghi’s famous pledge in July 2012, “Whatever It Take” and no taboos.


Notes From Underground: FOMC Minutes (Upon Further Review)

October 12, 2011

Tonight will be all quick hitters as the big news is sparse, to say the least. The Fed released the minutes of the September FOMC meeting. Besides discussing the idea of QE3, the most interesting read was that Fisher was not as hawkish as his NO VOTE seemed. This makes sense as his speeches this week have been pretty DOVISH and I had thought that he was contradicting himself.