What is going on with the Federal Reserve ?

[gaussian]

https://www.cnbc.com/2018/12/21/ny-...ys-the-fed-could-reevaluate-view-in-2019.html

We did not make a decision to change the balance sheet normalization right now, but as I said, we're going to go into the new year with eyes wide open, willing to read the data, and reassess the economic outlook and take the right policy decisions," Williams told CNBC.

Is this a joke ? How bad can they get, this cannot be the leaders of a trillion dollar industry... Destroy the bond market, only to backtrack 2 days later saying willing to read the data now ? This has to be one of the cons in modern economy, how can they be so stupid and have such important positions at the same time ? WILLING TO READ THE DATA he said, they clearly are not data dependent as they seemed to preach, by reading there own data standards, indicated serious troubles of tightening too quick, inflation is way below 2 %, commodities and oil have to drop 40 % in a few months to be considered under 2 % inflation going forward ? 29 % drop wasn't enough ?

Fuck Jerome " Gut Feeling " Powell and his cronies, they knew exactly what they were doing, they use the shadow rate theory to asses situation, and that theory indicated bond market destruction if they did not wait it out until Jan-March 2019 to tighten sheet again... These clowns will soften up big time January 30th at next meeting, and by end 2019 cut rates again, Australia about to cut rates and QE, Canada paused hikes and it seems permanent, US firing at all cylinders tho

Don't take this personally but I think it's time you hang up trading and take up something like basket weaving. You are not emotionally stable enough for this. I assume you lost money betting against the near certain rate hike? The CME was posting odds of a hike well above 70% going into the meeting.

Do you honestly believe the DOW 100K meme? The market was a blast furnace and ripe for huge inflationary risk. I do not fault the fed in the slightest for raising the interest rates. I'm just upset I got into the 10 year too early and got stopped out in the volatility prior to the massive spike as yields dropped.

Housing is out of control, debt in general is out of control, and the huge gains we saw from 2016 to early 2018 were out of control. The CPI was flat, and we were entering a period where a liquidity trap was probable. Joe 401k sees declining interest rates in traditionally safe investments and decides to horde his cash instead of putting it back into the economy. This was a risk and in my opinion a much-needed injection of chemo into a malignantly growing market. We are now watching the market plummet back to where it belongs. I plan on increasing my total market fund contributions all the way down. This is a fire sale for me.

He definitely made the investors unhappy. And consequently the president. Not sure if it was coincidental or premeditated.

The president who now claims to know tech better than anyone also seems to think he knows the market better than anyone. With gems like "virtually no inflation" you have to wonder what economics school he came from. Anyone who thinks the fed is raising rates to get revenge on Trump is very poorly informed on economics (this seems to be a common viewpoint of always-trumpers). Tariff man has been a net negative for the economy in general. I don't think you should put much stock in anything he says anymore.

 

[ktm]

Some of you may be confusing economics with the level of the market.

Powell says they are data dependent. That's pretty much it. Williams came out today to tell everyone again - in smaller words I guess - what that means.

The Fed only cares about market levels to the extent that it affects investor confidence on the downside or bubblish behavior on the upside. A trader is not an investor. In terms of investors, there were people as far as you could see that felt like SP2900 was fair value and that we were easily popping over 3000 by year end. Those folks should be pretty happy with things being 15-20% cheaper today.

Some economists have made a very salient point in all of this. The Fed needs to "reload the gun" here by getting interest rates back up a few more ticks and clearing the balance sheet. If they don't do that, they won't have anything to use when the actual real shit hits the real fan down the road. This is the time for that. It always amazes me how many traders have never seen the market go down materially. We are down less than 20% and the VIX is 30.

Sure it's tough right now for the longs, but when the sentiment changes this thing will fly right back up.

 

[Stockolio]

Don't take this personally but I think it's time you hang up trading and take up something like basket weaving. You are not emotionally stable enough for this. I assume you lost money betting against the near certain rate hike? The CME was posting odds of a hike well above 70% going into the meeting.

Do you honestly believe the DOW 100K meme? The market was a blast furnace and ripe for huge inflationary risk. I do not fault the fed in the slightest for raising the interest rates. I'm just upset I got into the 10 year too early and got stopped out in the volatility prior to the massive spike as yields dropped.

Housing is out of control, debt in general is out of control, and the huge gains we saw from 2016 to early 2018 were out of control. The CPI was flat, and we were entering a period where a liquidity trap was probable. Joe 401k sees declining interest rates in traditionally safe investments and decides to horde his cash instead of putting it back into the economy. This was a risk and in my opinion a much-needed injection of chemo into a malignantly growing market. We are now watching the market plummet back to where it belongs. I plan on increasing my total market fund contributions all the way down. This is a fire sale for me.



The president who now claims to know tech better than anyone also seems to think he knows the market better than anyone. With gems like "virtually no inflation" you have to wonder what economics school he came from. Anyone who thinks the fed is raising rates to get revenge on Trump is very poorly informed on economics (this seems to be a common viewpoint of always-trumpers). Tariff man has been a net negative for the economy in general. I don't think you should put much stock in anything he says anymore.

Why try to insult or belittle someone on an evidence backed posting ? I should hang up trading ? LOL

 

[gaussian]

Why try to insult or belittle someone on an evidence backed posting ? I should hang up trading ? LOL

Exactly what part of your post wasn't an emotional knee jerk reaction to the raise?

Could it be:

Is this a joke ? How bad can they get, this cannot be the leaders of a trillion dollar industry...

I dont see any evidence...

he said, they clearly are not data dependent as they seemed to preach, by reading there own data standards, indicated serious troubles of tightening too quick, inflation is way below 2 %, commodities and oil have to drop 40 % in a few months to be considered under 2 % inflation going forward ? 29 % drop wasn't enough ?

No citations...I don't see any evidence here either...

Ah, maybe it was this great straight-from-the-conspiracy part:

Fuck Jerome " Gut Feeling " Powell and his cronies, they knew exactly what they were doing, they use the shadow rate theory to asses situation

Nope...seems like pointless whining stemming from a misunderstanding of basic macroeconomics to me.

Maybe its this one...

These clowns will soften up big time January 30th at next meeting, and by end 2019 cut rates again, Australia about to cut rates and QE, Canada paused hikes and it seems permanent, US firing at all cylinders tho

Nope. Still whining. This time you sound like a mid-day CNBC pundit. Marginal improvement. By this point you had failed to recognize simple macroeconomics and the function of the fed all in one post. It's almost like you (and literally the rest of the average buy-and-hold investors) thought the market was just going to skyrocket to DOW 100K and we'd be the most winningest (TM) country in the world. Maybe I was too strong telling you to quit. Perhaps going back to school for a few semester in economics would straighten you out.

At any rate, could you point to the part of your multi-paragraph whine-fest where there was substantial evidence this hike wasn't warranted? I sure didn't see any. I simply suggested you quit whining and take up something where you won't ruin your livelihood on an emotional downturn. I'm looking out for you.

 

[jeffalvinson]

Its not the job of the Federal Reserve to worry about the stock market. They simply look at all the data and then make decisions based on that data.
They know for sure that the last two Fed Chiefs left interest rates too low for too long, and the side effect of that error is a stock and housing bubble.
Now, as they continue to look at data and make adjustments to normalize interest rates and make them more neutral and comparable with the yield on the 10 year bond, the side effect with be a stock and housing market of lesser value.
The Fed Lending Rate....the Stock Market Value....and Housing Price Values is a never ending Cycle of Fluctuations representing Bull and Bear Cycles, and it will always be that way.

The most time proven concern for the market here, is a monthly candle closing below the 40 month moving average. Looking back many decades, when that happens, a bear market follows:
[SP500, 25 years, monthly candles, 40 ma]
Notice in 2001 a monthly candle closed below the 40ma and a Bear Market followed.
Notice in 2008 a monthly candle closed below the 40ma and a Bear Market followed.

--------------------------------------------------------------------------------------------------

[SP500, 5 years, monthly candles, 40ma]
Notice the monthly candles of Jan & Feb 2016 spiked through the 40ma, but neither
month closed below the 40ma. Bear market averted and Bull Market continued.
Now notice the SP500 is currently sitting just above the 40ma with 4 trading days left
in the month.

 

[zdreg]

don't worry. people will be ranting soon enough about stagflation and then followed by hyperinflation

 

[zdreg]

The old bastard Powell is well past his use by date.
Fed full of old white people.
Hearing him talk, doddery old man.

"Fed full of old white people."
Put in a black man the US will soon be a Zimbabwe. Put in a Latino the US will soon be a Venezuela.

your post is nonsensical. it deserves a nonsensical reply. thanks for giving me the opportunity to post one.

 

[trickshot]

Trump's trade wars is the cause of all this volatility, the fed is only partly to be blamed.

The way Trump thinks about economic growth and trade is that it has to be a zero sum game, but nothing can be further from the truth. China was responsible for 27% of global growth in the past few years, thats far larger any other country (including the US), you have a burgeoning middle class population in China and these consumers are all potential consumers of American goods and services, its painfully obvious that hammering the fastest growing consumer market in the world is going to be a disaster for the global economy and US companies.

Trump also fails to realize that you can't coerce consumers to buy your products, all the measures taken by the Trump administration thus far has only weakened America's soft power, they can't bully people into buying US goods and services.

Then there is the problem of the huge tariffs that will either cause inflation to skyrocket or corporate profit margins to tank, its going to be a disaster if we don't get a deal by 1 March.

 

[bbpp]

Bother, you are right.
Fed raise rate all the way, but market did well all the way. It was until trump launch trade wars.
Historically, bear market never concur with fed raising rate. It has been the other way round:
bear market concurs with Fed lowering rate.
So it was not Fed raising rate, it was trade war that beat down the market.

 

[SunTrader]

Trump's trade wars is the cause of all this volatility, the fed is only partly to be blamed....
... , its going to be a disaster if we don't get a deal by 1 March.

if that deal also includes getting Drumpf to resign - then disaster averted. Maybe.