it ain't that complicated. If you don'tbelieve me read Morgan Stanley's preview for the semi-annual testimony: The Fedâs economic outlook has been consistent and well spelled out for some time, both in the official FOMC statements and in numerous speeches by Fed officials. They expect a period of below trend growth to help ease the âhigh level of resource utilizationâ and allow inflation to continue gradually moderating towards the 1% to 2% comfort zone. As the housing and auto recessions ease, they see growth returning to what they would perceive to be the sustainable trend of around 3% later in the year. Within this baseline forecast, the predominant risk is seen to be higher inflation. Chairman Bernankeâs testimony will likely broadly reiterate this outlook. Remarks from a number of Fed officials in the latest week had a clearly hawkish tilt, however, suggesting that there may be increasing nervousness among Fed officials that upside inflation risks are rising, and itâs possible the Chairmanâs testimony will hint at this.
I did not argue with that - I don't expect miracles from H-H testimony either. I argued about your statement that Bies is not a dove. I also did not say it is complicated - I said you oversimplify it. By the way MS research sucks (e.g. Roach) - there are much better reads / economists around. EOF
I love it when they refer to the FED as if they are of one mind all the time. They issue an official statement once they have come to a majority decision. There are always dissenters and always those who think rate hike while others think rate drop. Also, their latest policy statement was DIFFERENT than several previous ones. It was different in that it took a more "dovish" stance on inflation and a more optimistic outlook on housing. If the FED outlook was so clearly spelled out, why would they issue a statment about easing inflationary pressures while at the same time "there may be increasing nervousness among Fed officials that upside inflation risks are rising, and itâs possible the Chairmanâs testimony will hint at this"? The other funny thing is that they are supposed to be nonpartisan, yet they are appointed by whatever president is in office. With two seats to fill, do you think Bush wants someone who is a hard core inflation fighter, or one who will just let the situation play itself out for the next year and a half? This coming from someone who has never voted for a Democrat for president. The current administration is so unpopular right now that their only saving grace is that stock market is at all time highs and unemployment is very low.
If you listen to this guy, you are asking for it. Him and his friend Jack lacker belongs to the endanger species list. Either that or they are insane. Look at the 2006 votes, everyone said Hold Rate, Lacker said no. It's people like these 2 that will destroy the economy.
My calls on chance of rate hikes this year, all the BS media hype, and the effect of being wrong: US FOMC - - Zero - a million gazillion times minus Zero. And if you believe housing and auto sales are bottoming, or any of the hawkish PR, close your eyes and put your hand out underneath me. The only reason for FOMC hawk talk is to tell you there will be no cut - - NOT that there will be a hike. Further, it is too soon to even discern the effect of all of the successive increases of 05 and 06 and by no means clear that an 07 recession has been avoided. If you believe the S & P 500 or the stock market is the US economy - - same as above -- put your hand out... If I'm wrong -- 50--50 chance of market selloff. Note that McCulley of Pimco seemed certain on TV recently that "stocks to be taken out back and shot". BOJ -- Zero, I think. This is the biggest and toughest interest rate call question on the planet and the biggest unfair trade practice scam ever. Total chaos to try to discern the business media sewage emitted by all the players with an interest in the outcome. Amazing that the Chinese haven't told us to "go screw about the yuan -- yell at the Japs". If I'm wrong on BOJ - - worldwide selloff - just like last May when the end of ZIRP talk panicked carry trade. EU -- 50 - 50. This Trichet is one hard, independent, dangerous and credible mofo. Australia and NZ also run by tough guy CBs fwiw. If I'm wrong on EU. No effect on markets because my call was 50-50.
So all in all you're saying 50-50. Wait I'm flipping a coin.... and.... yes.... it's tails...... so what does that mean. Thanks for the opine and yes what you says seems true EXCEPT BOJ.
great to see that there are still plenty of opinions of this kind. Just confirms that rates have room to go up - and in a big way. This is going to be a good year...
Luckily the dumb public don't understand anything about money, else they would have realized that despite the number of dollars in circulation having doubled during the past 6 years, the markets are not anywhere close to doubling. Hardly a great "investment".
America has always had jobs for everyone that wanted to work. We wouldn't be absorbing tens of thousands of illegals every year if we didn't have jobs for them. One of the reasons I believe the job market is so strong is that people are scambling to earn money to pay their mortgages that are resetting. Some of these people wouldn't be out working if they didn't have too. John