Janet hath saved us from the biblical flooding by not hiking rates and striking a dovish tone for Fed policy in 2016.
The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.
Risk on while we muddle through this earnings season, giving excuses about softness in China and currencies, all whilst awaiting further dovishness from the next Fed meeting in March. It’s cute how earnings used to matter.
Below is the December dot plot. It will be interesting to see how the January dot plot overlays:
Taking the lower bounds of the 0.25% ranges for each year, the estimates for Fed Funds rates are as follows from the December meeting:
2016 = 1.16%
2017 = 2.29%
2018 = 3.07%
Longer Run = 3.41%
We are up 100 handles since a week ago. Everyone who is looking to short here will be forced to cover as we take a shot at getting back to even on the year. Don’t think we can’t go up another quick 100 just to catch everyone off guard.
P.S. The first move on FOMC Minutes days are always wrong. Appears we are tanking on the dovish news. Looking forward to the massive rally to close at the highs.
If you enjoy the content at iBankCoin, please follow us on Twitter
#rampstamp?
I almost forgot. Thx for the reminder.
Back on the ark, lads.