Thoughts?
Personally, fact that rate hike expectation is pushed back by another quarter is a perfect indicator that the US/global economy isn’t as strong as many think and that, it will be harder to start raising rates this year - the “big pullback” may not be that far.
PS: I foresee big problems for 2016 winner…presiding over a cycle of rate hikes with a massive debt book is going to be anything but easy.
I think the pullback is more likely to be caused by rate hikes than pushing them into next year. Everything rallied today.
I still think that we will see 25-50bp rate hikes by the end of the year (from 0). Even if it’s just symbolic I think they will start the rate hike cycle. They might sit on 0.50% through 2016 though. Too much dollar strength, too much EM dependence and too much disparity between US and other developed economies.
I started raising cash last week and probably will not reinvest it despite today’s announcement.
More dovish than I expected. Fed funds projections marked down sharply is the most telling IMO. Seems like a bit of an over reaction in the short time between meetings. I expected, and think its appropriate, to start raising rates this year at a slow pace (not necessessarily every meeting! depending on the data).
Yellen is more dovish than Helicopter Ben and that is freakin hard to do.
Anyone else miss Ben? Not that I think he’s ‘better’ than Yellen he just seemed to answer difficult questions with ease.
Yellen always looks like she’s about to vomit all over the floor whenever someone asks her a question that might move the market.
this is so accurate
The Fed seems concerned about equity markets, which they shouldn’t be. None the less, they’re in a tough spot. A rapidly appreciating currency and an economy (arguably) warming up.
Fair enough, but I believe initial reaction of the market is not that imp- see where the market ends on Friday. EUR/USD is already back to ~1.06 from 1.1 - problem is it’s all distorted.
I’ll try to find sme papers I’ve read on long term effect of such aggressive use of CB tools - this pushback is the first sign IMO