I’ve never seen a Fed throw out so many mixed signals. Just yesterday Fed’s Dudley warned about hiking rates. Today, Fed’s Lacker is talking so much shit, it’s almost unbelievable. Seriously, Lacker is calling for a 1994, Greenspan style, attack on rates — all the way up to 1.5%. It’s as if this man is unable to see how much debt we have and how our counterparts in Europe are undergoing significant easing of monetary policy.
Hey fucked face, you can’t hike rates by 100bps because you want to be Greenspan.
“While inflation pressures may seem a distant and theoretical concern right now, prudent preemptive action can help us avoid the hard-to-predict emergence of a situation that requires more drastic action after the fact,” Lacker said in a speech in Charleston, West Virginia.
“This preemptive action was successful and inflation continued to move lower…one could argue that the Fed’s preemptive moves in 1994 laid the foundation for the price stability we’ve enjoyed over the last 20-plus years,” Lacker said.
In his speech, he said the Fed was close to its targets of full employment and 2% inflation. As a result, the current target range for the federal funds rates “is extremely low” and should be 1.5% or higher.
Lacker said he expected the economy to rebound after its lackluster 1.1% growth rate in the first half of 2016, led by “solid growth in consumer outlays.” Business investment should also pickup later this year, he said.
This is truly delusional thinking, dangerous even. As such, the dollar is raging higher by 0.4% v the euro and gold is getting gobsmacked — lower by 1.2%.
That places gold at 3mo lows, below the $1,300 mark. As I mentioned yesterday, the gold miners now sport the worst technicals for the entire year. This is the season for a weaker gold market and I say this as a gold long. Perhaps this is the shakeout necessary that can put in a bottom.
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ultimately CB’s do not control rates. and believing they are in control leads to systemic collapse.
damn gold slamdown. .. incredible….. should be well over 2k ounce and yet they are trashing this to maintain the ponzi chimera…. buying more if this continues…
This is a man trying to please his masters. Doesn’t he know it’s over? Nothing can save us now. This was ruinous policy from the start. Fiscal policy has been so unbalanced and remains so that there is nothing monetary policy can do to fix it. We are in a tight spot.
Tower of Babble
Your commenters building a wall of worry Drumpf would be proud of
yeah just vote Hillary and keep piling into AMZN and NFLX at p/e over 200 and 300 respectively… and the most bubblicious S&P500 ever..
Or focus on your primary income, diversify, and plan for 3-4% returns
that’s implicit, & yet all that FANG and TSLA diversification and 3-4% at net NIRP… . should work out well…
non-market cap weighting, foreign markets, managed futures all ways to avoid FANG and still make more than a CD. Investing isn’t binary, there’s a spectrum of choices.