I have no idea what this man is talking about. Tom Porcelli, chief economist from RBC, is out with a note saying if the Fed is truly data dependent it will hikes rates in March.
Heretofore, the Fed had a dual mandate, targeting full employment and an inflation rate of 2%. While we’ve accomplished the former, we are still miserably below inflation targets. Moreover, and it goes without saying, all recent turmoil in financial markets are suggestive of further deflationary pressures.
Nonetheless, Porcelli believes the environment is more than ripe for a series of hikes.
He closes his rant suggesting that inaction by the Fed in March means they’ve ceded to the will of markets, fearful of the commodity collapse and its subsequent maladies.
If you enjoy the content at iBankCoin, please follow us on Twitter“For all of the effort the Fed has put into communicating to markets that monetary policy decisions are data dependent, a no move at the March meeting (our base case) will prove the exact opposite,” wrote Chief U.S. Economist Tom Porcelli.
“Note that a Fed forecast for core PCE prices to hit 1.6 percent by the end of 2016 and for the unemployment rate to be at 4.7 percent was justification enough to usher in a baseline view of four rates hikes this year,” wrote Porcelli, referencing the projections monetary policymakers made in December. “Not only has the trajectory toward those explicit goals not changed, it has accelerated!”
“A no hike in March reaffirms that monetary policy remains less about U.S. domestic realities and more about the perceived risks from the commodity price collapse and broad global malaise,” the economist wrote.
Please don’t anyone play the drinking game where you take a drink every time a Devil Dog comes on TeeVee or into the news, trying to push the market down. Drinking that much alcohol per day would be very injurious to your health. There have been people who drank themselves to death who were drinking less than that.