Posted on 09/17/2015 11:22:51 AM PDT by freddy005
With a 54-0 record without a rate hike (better than Floyd Mayweather's), and 58 Economisseds expecting no change, 3 a half-pregnant 13bps hike, and 53 expecting a 25bps hike, The Fed was always going to break someone's heart today. Bond yields and the USD were tumbling into the decision, which appeared correct as The Fed chickened out again...
**FOMC: NO POLICY CHANGE, 0-0.25% TARGET 'REMAINS APPROPRIATE' **FOMC: GLOBAL ECON,FIN EVENTS 'MAY RESTRAIN ECON ACTIVITY' **FOMC: VOTE 9-1; LACKER DISSENTS, WANTED 25 BPS HIKE Given the "no hike", it is clear that, as we noted, Goldman is still in charge and Hilsy is still leaker-in-chief. All eyes now on the dot-plots as The Fed desperately tries to regain some credibility, stifle uncertainty, and calmly reassure markets that "we've got your back."
Pre-FOMC: S&P Futs 2000.5, 10Y 2.26%, 2Y 77.5bps, EUR 1.1330, Gold $1118
Additional headlines include:
**FOMC LOWERS L-RUN EQUILIBRIUM FFR EST TO 3.5% V 3.8% JUNE **FOMC: 11 PARTICIPANTS SEE FFR BELOW 0.5% END 2015 VS 7 JUNE **FOMC: ECON WILL EXPAND MODERATE PACE W/ 'APPROPRIATE' ACCOM *FOMC: LABOR MKT IMPROVED,'SOLID' JOB GAINS, UNEMP DECLINING *FOMC: ONE PARTICIPANT SEES NEGATIVE FFR END-2015 & END-2016 *FED: MKT-BASED MEASURES OF INFLATION COMPENSATION MOVED LOWER
Continue...link http://www.zerohedge.com/news/2015-09-17/fed-chickens-out-again-fails-raise-55th-consecutive-time
(Excerpt) Read more at zerohedge.com ...
Was there ever any doubt about this non action. The economy is in such a mess, raising rates would have made an even bigger mess. All the talk about higher rates is and was just more political double talk.
The national debt is driven by the entitlement costs. The ceiling must be raised as a result. 71% of the budget is on automatic pilot. With 10,000 baby boomers retiring every day for the next 20 years, the entitlement costs will rise regardless
I’m tired of hearing about the social security entitlement crap. Anytime they want to give me back the money I paid-in (with compound interest) over the last 49 years, I will be out of your hair.
Wonder what Trump thinks.
The service of the Debt (interest payments only) is now 4th or 5th in terms of cost to the Fed Gov’t because any one seriously following this ponzi scheme knows that the ONLY way to pay for the Government Expenses is by ALWAYS BE BORROWING! The reason that the “Debt Ceiling” has to be raised (in the eyes of the Fed Res) is because the Federal Gov’t has to be able to borrow “MORE” in order to pay off its previous debts. Now, it’s simply borrow more to just keep serving the debt! Rates can NEVER go back to “normal” (5%) because that would mean an automatic Federal Gov’t default....again: Welcome to Japan 2.0 (U.S.) because is in worst shape in terms of debt to GDP- yet their 10 yr Interests rates are 0.3% of 1%!!
So, after seven years of 0% interest rates our economy isn't strong enough to withstand a quarter percent (0.25%) rate hike?
If that doesn't tell you all just how bad our economy truly is, I don't know what will.
The elderly who rely on interest rate income continue to get hammered while Obama's Wall Street buddies make out like bandits.
Shameful.
Before a single candidate could criticize the FED for it's horrible money policies, that candidate would have to find a way to communicate in sound-bites what it is the FED is doing.
That's a losing proposition for any candidate, and I share your frustration, BTW.
We have to deal with the mess sometime.
Up next is QE something, then ZIRP and we’ll end up in the NIRP zone soon enough. We should just deal with it now and let the cards fall where they may.
Although I think the Fed wants NIRP so it can rob more from us.
Tells you how weak the economy really is.
Go back to when the fed was instituted....the dollar has declined in historical value.
Having painted themselves into a corner, the Fed solution is to apply a second coat.
Yup. Local bank is offering a money market rate of 0.25%. If you can scrape together $100,000.00, then they boost the rate up to 0.30%. Woot!
Amen! And if I were the Republican field I’d be hammering this point EVERYDAY until election! Obama and the Clintons are LOVED by Wall Street....why? It’s obvious! There is NO “Recovery” and the 0.01% have NEVER done better...thanks to the Socialist LEFT and their uniparty Co-horts- the Rinos!!
Your Quote; “Here’s the problem: at least 95% (or more) of the American People do not understand the role of the FED, or what the FED has been doing these past 7 years now.”
Make that 99.9% and the FED has been doing this since 1913 and went “all in” since 1971! I laugh watching Nixon on Youtube in an Oval Office address to the nation, “I have instructed the Secretary of the Treasury to TEMPORARILY...”de-peg the U.S. Dollar from Gold!
FACTS: Medium U.S. Household Incomes in 1971 = $9,000 which would buy the equivalent of 240 “ounces” of Gold back then.
2015 Medium Household Income = $57,000 and now can only purchase “50” ounces of Gold! I’m not a Gold Bug as I don’t view gold as an investment but instead as a “real” measure of money in comparison to all fiat currencies!
For the buyer perhaps, but the seller doesn't benefit.
Raise your hand if you really thought Yellen was going to raise rates.
LOL. Anyone who thinks that SS is a pension scheme is a fool. Once you put your money into SS, it no longer belongs to you (Flemming v. Nestor.). The government can and has changed the benefits anytime it wants.
SS is a Ponzi scheme. For those of us receiving benefits now, we get far more out of the system than we put in. The same holds true for Medicare where the average recipient receives three times what they contributed.
SS has been in the red since 2010, i.e., payments exceed revenue, and Medicare has been in the red since 2008. SS and Medicare are pay as you go programs with today's workers paying for today's retirees. In order to make up the shortfall, the General Fund must redeem T-bills from the SS and Medicare Trust Funds. Since the General Fund must borrow about 40% of what it spends, we must borrow money to redeem the T-bills. The SS and Medicare Trust Funds are part of the national debt and held under "Intragovernmental Holdings."
The reason that the “Debt Ceiling” has to be raised (in the eyes of the Fed Res) is because the Federal Gov’t has to be able to borrow “MORE” in order to pay off its previous debts.
The debt limit must be raised because the entitlement programs keep growing in terms of numbers. By 2030 one out of five in this country will be 65 or older, about twice what it is now. And SS benefits are increased due to COLAs, which are not linked to revenue.
Rates can NEVER go back to “normal” (5%) because that would mean an automatic Federal Gov’t default....again:
Says who? The Fed may not be able to control the rates if we have rampant inflation. What happens in China, now the world's economic engine, will have an impact here.
ah, yes.
that could very well be.
Janet Yellen has some explaining to do.
She must have known for months that the economy was too weak to allow interest rates to be raised. So why didn’t she tell us that?
Why, instead, did she continually give the impression that the Fed would be raising interest rates today, which implied that the economy was doing well enough to sustain a rate hike? Who benefitted from this?
Barack Obama and the Democrats benefitted. They and the Obama-supporting media have been using every propaganda ploy to try to convince Americans that our economy has been rolling along like never before, that prosperity wasn’t just around the corner, it was already here.
And the Fed Chairwoman was instrumental in that effort by assuring everyone that, because of Obama’s wonderful economy, a September rate hike was virtually in the cards.
Of course, to continue to help Obama, she had to keep interest rates from rising because she knew that in our weak economy a rate hike would trigger a recession which would darken Obama’s final year in office.
Janet Yellen really needs to step down now. She has lost credibility and is taking the credibility of the Fed down with her.
But of course Obama will not replace her because he knows she will continue to serve his propaganda interests.
In a few days, today’s non-rate-hike will be forgotten, and we’ll begin to hear a new round of assurances from the Fed Chairwoman that the Fed will almost certainly be raising interest rates in December thanks to Obama’s continuing efforts to take the economy to new heights.
EXACTLY what I am thinking, but I would carry it a step further and suggest that part of the "scorched earth" policy of the current regime is to NOT raise the interest rates until after the next election.
If a Republican wins the White House, raising the interest rates may cause the stock market bubble to burst and the blame-game propaganda against the Republicans can recommence.
Recall that Obama has already said on more than one occasion that he intends to remain a prominent progressive voice even after he is no longer POTUS. The "progress" of progressivism ( new name for socialism/communism ) does not necessarily depend on winning or losing elections.
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