Posts Tagged ‘rate hikes’

Notes From Underground: Some Perspective on Wednesday’s FOMC Meeting

June 13, 2017

The FED has painted itself into the proverbial corner by pre-announcing a rate hike. The market will be listening to Chair Janet Yellen’s press conference, which takes place at 1:30 CDT, a half hour after the Fed releases its statement and summary of economic projections. The market is expecting some discussion Fed’s balance sheet unwind, but Yellen will be cautious as she won’t want to cause a large selloff in the Treasuries led by the algo-driven headline readers. Tomorrow morning the Bureau of Labor Statistics releases the CPI data, alongside the Census Bureau’s retail sales data. Market consensus is for tepid numbers on both releases.

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Notes From Underground: Will Janet Yellen Paint It Black?

January 26, 2016

The market is in disarray as it anticipates tomorrow’s FOMC statement. Will it lean dovish? The turmoil in global markets is having negative impacts on capex and the wealth effect as global equity markets have dropped considerably since the December 16 rate increase. Do I believe that the 25 basis point rise is the catalyst for the destruction of household wealth? NO. But the FED is confronted with a worsening condition in terms of TOO MUCH DEBT IN A DECLINING PROFIT ENVIRONMENT. As Michael Pettis, Felix Zulauf and others have postulated for a very long time, too much debt on a balance only matters when the debt can’t be serviced. Zulauf and Jeffrey Gundlach have voiced concerns about the FED being irresponsible for raising rates as the global economy slows. Art Cashin, the great voice of reason and stability, has been on record for weeks predicting the FED will lower rates to ZERO before the market ever sees ONE PERCENT.

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