Why the fed will never get what it wants..

[S2007S]

Peter Boockvar has said it perfectly about the fed waiting and waiting and finding the perfect opportunity for the fed to raise rates that it will never be able to do because only in fairy tales is where perfect worlds exist....said perfectly... One of the handful of people out there who can actually see the lies of the fed.


http://www.cnbc.com/2016/05/01/why-the-fed-will-never-get-what-it-wants-strategist.html

 

[i960]

The Fed already knows all of this. This is a simple biding of time / stalemate game.

 

[eurusdzn]

The yield on the 3 month treasury bill is 22bp.
The yield on the June 2016 3 month Eurodollar futures contract is 64 bp
The difference between the above two rates is the TED spread (risk free 3 month UST vs. 3 month LIBOR)..... See link below.

https://research.stlouisfed.org/fred2/series/TEDRATE

The June, 2019 3 month Eurodollar futures contract yield is presently 149 bp.
Assuming in a stable , similar risk environment that the TED spread holds at 41 bp in June 2019 this translates into an 85 bp. rise in 3 month treasury rates 3 years from now.

A handful of people? Seems everone(market) believes rates are not going anywhere fast.
Markets of course are wrong often and the error has been in overestimating normalization of rates. I trust you have acted on your strong opinions and made millions and will do so again.

Ps. As stated recently by GAT you could be correct on the rates and they could go
to zero or NIRP on the 3 month UST 3 years from now but have 100bp or more of
Fear/stress/volatility (TED spread) as it did in 2008.

 

[fhl]

Beyond belief that these kind of people are running our country.
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Livesquawk @livesquawk
Fed's Lockhart: BoJ Runs Risk Of Its MonPol Distorting Japanese Markets -- RTRS

 

[FireWalker]

So, if you raise the rate, it kills the spread, therefore only show information to the boss that encourages no change.


Edit: It reminds me of sophomore year in college. I was standing in the middle of the business school and had been thinking I wanted to major in Finance, but then I watched the herd migration patterns directly into Finance. I decided to study Accounting instead. Interestingly, while sitting in one of the advanced accounting classes, we reviewed all the basic finance and I thought to myself, that all Finance is doing is a couple of derivatives of what I was studying right now. Then, there was the movie Wall Street (the original).

 

[fhl]

After a 7 yr expansion, the Fed is unsure if the economy "warrants" a move to 50 bps.

 

[S2007S]

After a 7 yr expansion, the Fed is unsure if the economy "warrants" a move to 50 bps.

7 year expansion ???

That was because of the free printed trillions the fed threw at economy

That chart is all make believe... The last 30 years of economic activity is all make believe

 

[der_kommissar]

Regardless...this is just more proof that CB's ARE the market...We have a small group of "true believers" that can't seem to figure this one out.

 

[S2007S]

Regardless...this is just more proof that CB's ARE the market...We have a small group of "true believers" that can't seem to figure this one out.

Central banks are the market....that's how pathetic this game has become....they control the markets

 

[fhl]

7 year expansion ???

That was because of the free printed trillions the fed threw at economy

That chart is all make believe... The last 30 years of economic activity is all make believe

Yes, you are right. If we really had this expansion the chart shows, then why can't they raise rates?
Or if they can't raise rates, then we know the economic data we're being shown is all a bunch of baloney.