Seeking Alpha

FOMC: Rate hikes coming sooner and faster

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Comments (30)
  • Grant Dossetto
    , contributor
    Comments (169) | Send Message
     
    Faster rate hikes? We must have read a different statement.
    19 Mar 2014, 02:20 PM Reply Like
  • trader57
    , contributor
    Comments (291) | Send Message
     
    Yellen is making dovish statements. Looks like treasury traders are just selling the good news and taking profits.
    19 Mar 2014, 02:44 PM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (4318) | Send Message
     
    Yeah, I'm not seeing this as indicating faster rate hikes either. I don't think there was anything surprising in what anybody said. It maybe did quash speculation that they could delay their first rate hike until 2016, but that was a long shot anyway.
    19 Mar 2014, 03:48 PM Reply Like
  • filipo
    , contributor
    Comments (3975) | Send Message
     
    Well, rates hiked today for a start. Lol, I call this Fed bluffing.
    19 Mar 2014, 04:59 PM Reply Like
  • bbro
    , contributor
    Comments (9915) | Send Message
     
    3 month libor priced in December 2016 at 2.20%....this is not a big deal...unless your long bonds and gold....
    19 Mar 2014, 02:31 PM Reply Like
  • bbro
    , contributor
    Comments (9915) | Send Message
     
    Every business cycle since 1955 had a funds rate of at least 150 bps over the inflation rate before it ended....
    19 Mar 2014, 03:00 PM Reply Like
  • bbro
    , contributor
    Comments (9915) | Send Message
     
    If you use the PCE Price Index ( which is the Fed's marker)...then...every business
    cycle since 1955 has had a funds rate of at least 250 bps over the inflation rate
    before it ended....
    20 Mar 2014, 03:43 AM Reply Like
  • bbro
    , contributor
    Comments (9915) | Send Message
     
    How about this stat...No recession has started over the last 50 years without
    the Fed Funds rate hitting 5% first...currently you can't find 5% on the eurodollar futures curve and it goes out to March 2024....
    20 Mar 2014, 04:48 AM Reply Like
  • trader57
    , contributor
    Comments (291) | Send Message
     
    I think actual inflation is already over 2%. Government numbers appear to underweight food prices. Inflation this year is running above 2% around here, and we've had a tepid economic recovery in the Southwest.
    19 Mar 2014, 02:39 PM Reply Like
  • fred1724
    , contributor
    Comments (67) | Send Message
     
    Underweight food prices? The Gov't CPI is a manufactured Lie.
    19 Mar 2014, 03:23 PM Reply Like
  • Paulo Santos
    , contributor
    Comments (21749) | Send Message
     
    Nearly 1/4 of the CPI is the rent people pay themselves ... :-) people need to be more generous with themselves before we see inflation! (eheh, just a joke, this rent is inferred from market rents).
    19 Mar 2014, 04:08 PM Reply Like
  • june1234
    , contributor
    Comments (2861) | Send Message
     
    EEM did not like what she said, banks and the dollar did though.
    19 Mar 2014, 02:52 PM Reply Like
  • redarrow5150
    , contributor
    Comments (1034) | Send Message
     
    http://bit.ly/OD7HKU
    19 Mar 2014, 09:29 PM Reply Like
  • filipo
    , contributor
    Comments (3975) | Send Message
     
    red,
    Your link has been censored..... can't get it.
    20 Mar 2014, 03:37 AM Reply Like
  • DAVE22Q
    , contributor
    Comments (313) | Send Message
     
    take a dovish or neutral statement mill it through a psychotic bond vigilante and you get a rate spike. buying opportunity for those who can stay rational when the shorts scream SELL.
    19 Mar 2014, 02:54 PM Reply Like
  • june1234
    , contributor
    Comments (2861) | Send Message
     
    Yellen implied rate hike 6 months from the end of QE or March 15 . Bonds taking it on the chin. Banks will raise rates
    19 Mar 2014, 03:21 PM Reply Like
  • memshu
    , contributor
    Comments (587) | Send Message
     
    june
    i think this is great. lets have a sell off, shall we? i could use a little spike in vix
    19 Mar 2014, 03:48 PM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (4318) | Send Message
     
    It wasn't just bonds. Stocks dropped like a stone and gold was already lower and dropped further. The place to be was cash. The dollar rose as if they had already made the decision to raise rates. Incomprehensible.
    19 Mar 2014, 03:52 PM Reply Like
  • june1234
    , contributor
    Comments (2861) | Send Message
     
    She pulled a Ben from last May with that statement. rookie mistake.
    19 Mar 2014, 04:19 PM Reply Like
  • Hendershott
    , contributor
    Comments (1595) | Send Message
     
    A lot of handwringing about very little. "will continue to assess incoming data."....same old data dependent. Algorithms have to trade though.
    19 Mar 2014, 03:57 PM Reply Like
  • Smarty_Pants
    , contributor
    Comments (2874) | Send Message
     
    "13 of 16 members expect the first rate hike next year, with 10 seeing a Fed Funds rate of 1% or higher by the end of 2015."

     

    I love how the FED's predictive powers regarding economic events extends over 20 months into the future, yet they can't tell you what they themselves will do next month with any level of certainty.

     

    Even at $55 Billion a month, the FED is expanding the base money supply (and therefore also the federal debt) by over 4% annually in order to expand the economy by less than 2%. Personally I don't think that's a sustainable situation. Expect them to reverse tapering when the economy slows down again in 6 to 9 months.
    19 Mar 2014, 04:11 PM Reply Like
  • nooseah
    , contributor
    Comments (506) | Send Message
     
    Correct, smarty_pants.
    History shows Fed members' predictive powers to be worse than useless.

     

    Ole Yeller mentioned the impact of 'winter' on the economy, a claim which has already been disproven by several credible pundits. Other than the dimwits at the Fed, it has been a claim spouted mainly by CNBC anchors, sell-side analysts and mutual fund managers, all of whom have a vested interest in seeing the over-done stock rally continue.

     

    As you say, the 4% base money expansion versus 2% GDP growth (an over-estimation in itself) is unsustainable.
    19 Mar 2014, 09:48 PM Reply Like
  • redarrow5150
    , contributor
    Comments (1034) | Send Message
     
    Car Dealers, FED Ex & UPS along with several others would disagree about your weather thesis. Who are these "credible pundits?"
    19 Mar 2014, 09:52 PM Reply Like
  • Devn1
    , contributor
    Comments (2) | Send Message
     
    Sr. Data analyst working at Investment bank, trading ETFs, Stocks and Options
    19 Mar 2014, 04:47 PM Reply Like
  • Brian58
    , contributor
    Comments (164) | Send Message
     
    Wait until the 10 yr starts to climb, then they'll backpedal. There are over $700 trillion in interest rate derivatives outstanding. No way they can let rates climb.
    19 Mar 2014, 05:54 PM Reply Like
  • Grant Dossetto
    , contributor
    Comments (169) | Send Message
     
    If you get a market correction due to an end of QE and a raise in the short end of the curve you won't see the long end explode higher. You will get a nice flattening, perhaps as low as 1% on the 2-10 spread and 1.50% on the 3m-30. I'd guess both the 10 and 30 will fall a percent from here before they go up by one.
    20 Mar 2014, 09:20 AM Reply Like
  • nooseah
    , contributor
    Comments (506) | Send Message
     
    Darn! I went to buy more gold on this 'massive' price fall and premiums at merchants have barely budged. I just wish it would cheapen up properly.
    19 Mar 2014, 09:38 PM Reply Like
  • sethmcs
    , contributor
    Comments (3352) | Send Message
     
    I think the fed should hire Greenspan to teach Yellen how to answer questions without saying anything. What we need is fedspeak not clear concise answers.
    19 Mar 2014, 10:11 PM Reply Like
  • james.
    , contributor
    Comments (345) | Send Message
     
    Yellen's famous 3 words in her 2:30 pm Press Conference today of "about 6 months" in answer to a reporter's question "How long will you wait to raise Fed Funds Rate after QE3 end ?" is much ado about nothing ! Facts are facts , namely, the FRB estimates of future U.S. Economic Growth has always been overly optimistic ; therefore, her estimate of Fed Funds Rate hike 6 months after Oct 2014 ending of QE3 purchases is way too early. Why ? Obamacare has turned the 40 hr work week with two weeks paid vacation into a 29 hr work week with 2 weeks unpaid vacation ! Thus, according to the dialectic , people don't have purchasing power to buy the goods, thus defeating the poorest recovery in history ! This was a primary cause of the Great Depression ! Therefore, the drop in Gold price this week has been bogus, and is thus simply a technical pullback that earmarks the Price Objective of 169 on the GLD P & F Chart ! 169 = GLD is equivalent to approximately equal to $1760 per oz on Gold price = GCJ4 .
    This will be the first leg up on the Gold Super Cycle taking Gold to new all-time highs of $2700 per oz in May 2015. The Gold Double-Bottom in Dec 2013 at $1186 per oz was the end of a normal Bull Market correction for the 2nd Super Cycle Up-Leg ! March 19, 2014 at 8:01 pm PST.
    19 Mar 2014, 11:05 PM Reply Like
  • papayamon
    , contributor
    Comments (1186) | Send Message
     
    Another buying opportunity. That's what this brings.
    20 Mar 2014, 02:32 AM Reply Like
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