Posted on 05/22/2016 8:36:15 AM PDT by expat_panama
There are two possible explanations for why markets so badly misjudged how close the Federal Reserve is to resuming interest-rate hikes.
One possibility is that investors misread Fed Chair Janet Yellen’s speech on March 29 asserting that “caution is especially warranted” when it comes to raising rates with global risks so high and policymakers so low on conventional ammunition to counteract a downturn.
Yet it seems much more likely that markets received the surprisingly dovish message as it was intended and responded just as Yellen hoped, easing global stresses that had grown as the dollar’s rise exacerbated pressure on China to devalue its dollar-linked currency.
Wednesday’s release of the minutes from the Fed’s April 27 meeting...
...she couldn’t get other generally dovish policy-committee members to follow her.
Now the U.S. dollar index is rebounding...
...Markets had pegged December or possibly next February for the likely timing of the Fed’s next rate hike...
...“A June hike … seems to be a very realistic scenario,” wrote...
...most Fed policymakers were anxious to begin removing policy accommodation, ignoring Yellen’s call four weeks earlier to tread with extra care.
It seems likely that Yellen... ...change from her predecessor Ben Bernanke’s apparent ease in building a consensus.
Yellen’s speech had essentially positioned the Fed, at least temporarily, as the world’s central bank, making global growth economic and financial risks from China and other emerging markets just as much a part of the rate-setting calculus as inflation at home.
But while her stance seemed prudent in light of the market turmoil that followed closely after the Fed’s move to raise rates in December for the first time in a nearly a decade, her colleagues showed that they’re not prepared to play central bankers to the world — unless it’s clear that the world is falling apart.
(Excerpt) Read more at investors.com ...
►what's going on.
►how it will affect us.
►what we're going to have to do about it.
Then maybe after all these chores are done we'll still have time to rant about our favorite partisan faction.
The Fed - and the 8 families that own it - is indeed the world’s central bank.
All else is merely kabuki theater to keep the rest of us occupied.
--and that's where I stopped reading. Next what, they're all Jews?
No, none of them are Jews. What an insightful reply....
Do some research on who actually owns the Fed. 4 of those families are loosely American.
The Bank of the US (BUS) was where this started, and most of the families involved are still the same.
Do some research...
I'd be my pleasure if it could change anything but I could do research all day long and the Federal Reserve will still be a creation of the same U.S. Congress that approves all the upper management. I mean, these days Trump says he'd likely replace Fed chief Yellen if he wins so are we going to say it's really owned by 8 families who won't mind or did Trump ask permission or do we say Trump's wrong?
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