Fed's Plosser calls for rate hikes

The market doesn't care until it does. Mark my words, once rates start ticking up, they will do so faster and higher than anyone things possible at this moment. I've seen this movie before.

 

He simply is saying inflation needs monitoring.....no kidding.....highschool economics.

 

well it is more hawkish than usual. anybody saying that this is a normal speech from fed had their heads in the sand for the past 2 years.

expectations are more emphasized and that combined with the commodity rally, dollar selloff and the curve steepening is not painting a dovish picture.

that's why i a surprised about no reaction at all (in fact the inverse has happened). this just tells me that fed existence borders on irrelevance...

basically the market knows that the fed will swap price stability for... for what actually?...

 

agreed, and so has the market. My target is for fed rate hikes in late 2Q 2010 and I fully expect it to occur while unemployment is still in the process of moderating. I also expect gold to sink like the rock it is when the surprise first hike occurs. 15% burn on gold is not out of the question.

 

Plosser is the only decent member of the Fed

 

with ben behind the wheel? i consider this improbable. more likely gold at 2000 and long rates much higher.

ben is completely incompetent when it comes to any other time than brink of a total meltdown - then his money showers become reasonable of course.

 

Interesting discussion.

I wondered if anything is going to come out of this Thursday Senate hearing for Bernanke. Is there any realistic possibility he will have to step down? And if there is, who is his likely successor?

I'm not really a Fed watcher but I noticed that Bullard and Plosser are more hawkish than the others suggesting a rate hike may be needed before unemployment comes down.

And yet whenever the minutes come out they re-emphasize 'low rates for an extended period'. Is it just me, or do the comments of the Fed members not square entirely with the Fed statements/minutes??

 

Plosser is arguably the most hawkish memeber of the Fed. He had to be dragged kicking and screaming to cut rates even as markets and the economy imploded. His views do not reflect the rest of his associates.

 

Exactly right.