Fed's predictions? Hawkish or Dovish?

Discussion in 'Economics' started by Here4money, Nov 27, 2018.

  1. Here4money


    You all think he'll ease on his previous remarks? The fed should not be political so obviously rates should be raised, but with all this howling from DC and the market tumult....makes me think perhaps he'd keep them the same this season.
    murray t turtle likes this.
  2. S2007S


    I think they will say what the markets want to hear...they will lean more dovish and and state that they will be data dependent moving forward which will cause stocks to skyrocket into the stratosphere.
  3. JSOP


    He probably wants to continue to be hawkish and he really should be but he would be forced to at least sound a bit dovish, thanks to Trump's trade policy now impacting the markets a bit.
    Last edited: Nov 28, 2018
    tommcginnis likes this.
  4. SteveM


    -No pre-set policy path
    -Impact of hikes uncertain, may take a year or more to see
    -Gradual pace meant to balance risks of too fast or slow
    -Interest rates still low by historical standards
    -Gradual hikes balance risks to forecast
    -Great deal to like about US economic outlook
    -Expects solid US growth, low employment and near-target inflation
    -Paying 'very close attention' to data
    -Concerned about leveraged corporate borrowing, which could exacerbate economic downturn
    -No dangerous excesses in stock market
    -The US dollar is getting beaten up on the 'just below' comment and no preset path.

    Full quote:

    "While FOMC participants' projections are based on our best assessments of the outlook, there is no preset policy path. We will be paying very close attention to what incoming economic and financial data are telling us."

    Other key line:

    "We therefore began to raise our policy rate gradually toward levels that are more normal in a healthy economy. Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy‑‑that is, neither speeding up nor slowing down growth."

    As you can see in the market, this is dovish. Definitely more dovish than I expected. His references to gradual hikes are generally in the past tense.

    "Our gradual pace of raising interest rates has been an exercise in balancing risks."
    "Our path of gradual increases has been designed to balance these two risks."
    "We therefore began to raise our policy rate gradually toward levels that are more normal in a healthy economy."
    "We also know that the economic effects of our gradual rate increases are uncertain, and may take a year or more to be fully realized."
    Perhaps equally important is that he hardly mentions the gradual pace at all. Those are the only references.
    murray t turtle likes this.
  5. JSOP


    Exactly as I predicted. He tried to sound dovish just to appease the market and appease Trump.
  6. LS1Z28


    It's funny how interest rates went from a 'long way' from neutral to 'just below' neutral in less than 2 months. :rolleyes:
    Here4money and JSOP like this.
  7. Here4money


    Well, he hires the best people.
    LS1Z28 likes this.
  8. Overnight


    *snort..huh, wah? Sorry, I was sleeping. I'm pretty sure Powell is going to go dovish today, market will like it.

    Let me go back to my big bank employer as an analyst and tell you why I was right in retrospect, after the fact.*

    You know, I get paid $300,000 a year to say why I knew I was right 4,000 years ago. I KNEW this was going to happen! Here, let me show you the charts WHY I was right, now that the markets have drawn them. I, like every other analyst at a big bank, is a GENIUS, and KNOW what the market is going to do. I never said when, just that it would!

    Tomorrow morning, there is a 50-50 chance you are going to stub your toe. No matter what happens, I will never be wrong! AHAH! Next check please!
  9. Overnight


    The biggest snakes in this industry are the people that drive it. Who here would bet against me that Powell, Yellen, Bernanke and all those other types have told their closest friends and relatives what they were going to say, and funnel them money to trade that news beforehand?

    Why would they not? They are human beings greedy for money. They are all shit-jerks!
  10. Here4money


    That's legally protected shit-jerks to you!



    Hey there's an ideal for a hedge fund. It's based off the trades made by US congressmen.
    #10     Nov 28, 2018
    murray t turtle and Overnight like this.