MAR 16 17
SIT EC y POL
ZERO HEDGE.
ECONOMICS
Q: Do you think the FOMC was aiming for this outcome?
A: No, almost certainly not.
A: No, almost certainly not.
Q: So what do you make of
today’s market response?
A: The direction makes sense, but the
magnitude greatly surprised us. As shown in Exhibit 1, our factor model for
discerning monetary policy surprises from the co-movement of different asset
prices scored today's price action as the third-biggest dovish surprise at an
FOMC meeting since 2000, at least outside the financial crisis. (The only two
non-crisis meetings that were clearly bigger were the August 2011 move to
calendar guidance and the September 2013 decision not to taper QE; the March
2015 and March 2016 cuts in the dots were similar to today’s move.) And as shown in Exhibit 2, our FCI eased by
an estimated 14bp on the day—about 2.3 standard deviations and the
equivalent of almost one full cut in the funds rate—and is now considerably
easier than in early December, despite two funds rate hikes in the meantime. Our interpretation
is that markets must have been positioned for much more hawkish news than we
had thought.
Exhibit 1: According to Our
Factor Model, This Was a Large Dovish Surprise
Exhibit 2: Our FCI Has Reversed
Most of the Recent Tightening
Q: Do you think the FOMC was
aiming for this outcome?
A: No, almost certainly not.
The committee may have worried that a rate hike—especially a rate hike
that was not priced in the markets or predicted by most forecasters as recently
as three weeks ago—might lead to a large adverse reaction on the day, and
wanted to avoid such an outcome by erring slightly on the dovish side. But we feel quite confident that they were not aiming for a
large easing in financial conditions. After all, the primary point of hiking
rates is to tighten financial conditions, perhaps not suddenly but at least
gradually over time. And even
before today’s meeting, at least our own FCI was already fairly close to the
easiest levels of the past two years and this was likely one reason why the
committee decided to go for another hike just three months after the last one.
Q: So what do you expect from
the Fed for the rest of 2017?
A: Our modal
forecast remains for a total of three hikes this year, with remaining moves at
the meetings in June and September, followed by four hikes each in 2018 and
2019. We see a 60% subjective probability that the next hike occurs at the June
2017 meeting, 10% for July, and 20% for September. We also expect an announcement of gradual balance sheet rundown in
December; if
this does not occur, the likelihood of a fourth 2017 hike would increase.
At the margin, today’s FCI move has
increased our conviction that the committee will need
to deliver more tightening than priced in the markets at this point.
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In 2015, options expirations
mattered - stocks would tear higher into the event and like clockwork sink back
lower after. 2016 was not so obvious but the all-important 'quad-witch'
expirations still had some bias. However, if JPMorgan's
equity derivative strategists are right, tomorrow's 'quad-witch' - with
$1.4 trillion worth of S&P 500 notional set to expire - could lead to a
vicious cycle higher in volatility going forward.
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"..the Deep State’s next move is to pin
the coming stock market collapse on Trump. He’s the perfect fall guy... Right
now, the Federal Reserve is the Deep
State’s weapon of choice."
During the campaign, Trump called
Fed Chair Janet Yellen “highly political.” At
that point, he said the Fed should raise interest rates but wouldn’t because of
“political reasons.” (Raising rates before the election
would have hurt Hillary Clinton.)
Now, even a small rate increase is a lethal threat to the US
budget. The US government currently needs over $400 billion from
taxpayers just to pay the interest on its debt. Tax receipts are just over $2
trillion.
If interest rates rise…
- 1%, the government would need over $600 billion to pay the interest on its debt.
- 2%, it would need over $800 billion.
- 3%, it would need $1 trillion.
- 4%, it would need over $1.2 trillion, or over half of what it currently snatches from taxpayers—again, just to pay the interest.
Clearly, none of this is
sustainable.
The Deep State is
planning moves during Trump’s first 100 days in office that could change everything in sudden and unexpected ways.
Doug Casey and I put together
this time-sensitive video explaining how it could all go down. You must
see this urgent video before the Establishment makes its next move. Click here
to watch it now.
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POLITICS
"...the 'left' has accepted the neoconservative line that those who
advocate peace with Russia, other than on US imposed terms, are traitors to
America, including the President of the United States... We have reached the point that no dissent
from hating Russia is possible. This leaves war as the
only option."
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We have money for more destruction
abroad .. but not to fix destruction inside
“Portland Anarchist Road Care” claims PARC is an anarchist organization
dedicated to putting
“the state of the roads of PDX into the hands of the people.”
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"Something massive has been swept up just under the carpet..."
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WORLD ISSUES and ME
Highly racist news:
"I want to go to Canada with my
passport. For those without documents, I think (the United States) is
over. Now it's Canada's turn."
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DEMOCRACY NOW
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GLOBAL RESEARCH
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Impending
Danger: Today’s “Super-Fuzed”, Super-Powerful US Thermonuclear Weapons Directed
against Russia. “How is This Going to End?” (Putin) By Stephen Lendman,
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INFORMATION CLEARING HOUSE
The Dangerous Reality of an Iran War By Sharmine Narwani
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When America Interfered in a Russian Election By Margaret Kimberley
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AIPAC Gave $60K to Architect of Trump’s
Muslim Ban By Eli Clifton
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US and Israeli Codependent Relationship is
Not Just about Money By Ramzy
Baroud
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From Nuisance to Threat: The High Cost of
Truth By Paul Craig Roberts
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COUNTER PUNCH
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Teresa L. Ebert – M Zavarzadeh Class,
Media and the U.S. Election
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Sarah Anderson Going
After the Opioid Profiteers
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SPUTNIK and RT SHOWS
If Syria-Ru can’t put
down those planes.. they will lose the war
US Confirms Strike Near Syria's Idlib Following Reports of Multiple Casualties https://sputniknews.com/middleeast/201703171051671312-us-confirms-strike-idlib/
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The simulation of peace … while .. WW3 is on its way
US Firms to Work With Russia’s Geocell Producer Despite Tensions Between States https://sputniknews.com/business/201703171051672705-us-russia-geocells/
RELATED
NATO Buildup Near Russian Borders: French La Fayette Frigate Enters Black Sea https://sputniknews.com/military/201703171051672426-us-stinger-missiles-europe/
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Where are the RU-IR-Sy version of stinger?
Shoring Up Defense? US to Deploy Stinger Missiles to Europe https://sputniknews.com/military/201703171051672426-us-stinger-missiles-europe/
RELATED Humanit aid is OK .. but they need
high tech weapons too
Russian Servicemen Deliver Medicine, Humanitarian Aid to Syrians https://sputniknews.com/middleeast/201703171051672507-russia-syria-medicine-aid/
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Budget for wars of aggression have not been cut .. Casein
point: budget to Israel
US Cuts to UN May Hit People in 'Most Difficult and Dangerous Conflict Zones' https://sputniknews.com/us/201703171051672621-us-cuts-un-humanitarian-crises/
Related: US wars cause & aggravate the suffering of hunger-starvation
UN Warns of Greatest Crisis in Decades: More than 20 Million Facing Starvation https://sputniknews.com/society/201703121051490824-20-million-risk-starvation/
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Senators' Letter to Tillerson Start of New Campaign to Break With Obama's Legacy https://sputniknews.com/us/201703171051672792-senators-campaign-end-obama-era/
Related
Tables Turned: Have Obama and Soros Hacked Foreign Elections? https://sputniknews.com/politics/201703161051628013-tables-turned-obama-soros-hacked/
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WASHINGTON BLOG
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Posted on March 16, 2017 by Brandon
Turbeville MSM: main
stream media
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Posted on March 16, 2017 by Charles Hugh Smith
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If we had to summarize what’s
happened in eight years of “recovery,” we could start with this: everyone’s
been pushed into risky assets while
being told risk has been transformed from something to avoid (by buying risk-off
assets) to something you chase to score essentially guaranteed gains (by
buying risk-on assets).
The successful strategy for eight
years has been buy the dips because risk-on assets always recover and
hit new highs: housing, stocks,
bonds, bat guano futures–you name it.
Globally, financially
assets have soared from a 2008 low around $222 trillion to over $300 trillion.
Even in today’s financially jaded world, $80 trillion is an impressive number: over 4 times America’s
GDP of $18 trillion annually, and roughly equal to global GDP.
⇒ Keep Reading
⇒ Keep Reading
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NOTICIAS IN SPANISH
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Los nuevos fascistas del siglo XXI Toni Ramos
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Mujeres imprescindibles en la
historia del ecologismo Rosa
Martínez
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La ocupación israelí se ensaña
contra las mujeres palestinas Leandro
Albani
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El poder de las transnacionales y la
rapiña global Enric
Llopis
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Cancillería rusa: Caso Yahoo podría ser remedio para
distraer sobre nuevas filtraciones de WikiLeaks
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Keiser
report 1045 La "revolución" es la
apuesta por el sistema de criptodivisas
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PRESS TV
US
raid on Aleppo mosque kills many worshipers
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