Goldman Lies: Fed Hiking Two Times is Most Dovish Ever

This is Orwellian doublespeak. Goldman is out with new research, trying to help reflate assets, and lying. The suggestion that a doubling of the Federal funds rate over the next 8 months as being the most dovish of this century is not only laughable, but insulting.

Words cannot describe the utter horseshit that is forthcoming.

Excluding two meetings during the depths of the financial crisis in late 2008 and early 2009, the shock of Wednesday’s slash to the so-called “dot plot” was only exceeded by introduction of calendar-based forward guidance in 2011, the decision to forego “Septaper” in 2013, and last March’s markdown, according to Goldman:

“Markets had little doubt that the FOMC would leave the funds rate unchanged at yesterday’s meeting—futures markets implied only about a 5 percent chance of an increase before the announcement,” wrote Pandl and Struyven. “Yet the decision was clearly a major dovish surprise for markets, with interest rates declining across the curve and the dollar falling against other developed market currencies.”

“If the central bank unexpectedly tightens monetary policy, nominal interest rates will tend to rise, but breakeven inflation and stock prices will tend to fall,” the economists write, providing a theoretical example. “We can therefore infer something about the underlying macroeconomic shocks from the correlation pattern in markets.”

“The meaningful policy surprises in recent years are a puzzle in light of the large amount of information Fed officials now provide about their reaction function,” write the economists. “One might have thought that the details provided in the summary of economic projections and through the press conference would have made it easier for investors to anticipate the committee’s response to incoming data.”

In summary, war is peace. Up is down. Higher rates is dovish. Lower crude is bearish. Higher Trump polls is fascism.