Fed Hawks Are Gaining Sway, September Meeting Minutes Show

Investors Business Daily ^ | October 12, 2016 4:13 PM ET | JED GRAHAM

[expat_panama]

The Federal Reserve hawks pushing for an immediate rate hike in September lost the battle, but they may have gained the upper hand over the doves, minutes of the September meeting suggested.

With three members warning that the Fed risked losing its credibility or being forced to hike rates rapidly if the labor market got too tight, the group in the middle made a concession to the hawks — essentially pledging to hike rates in December unless there was a major shift in economic data.

The Fed noted in its Sept. 21 statement that the case for a rate hike had strengthened, but policymakers had "decided, for the time being, to wait for further evidence of continued progress" toward full employment and 2% inflation.

IBD'S TAKE: The rise in bond yields and recent stock headwinds suggest investors are taking Fed rate hike plans seriously.

"Some participants believed that it would be appropriate to raise the target range for the federal funds rate...

...The minutes explained that the doves resisted such a definitive statement clearly indicating that rates would rise in December, but the block in the middle shifted toward the hawks...

...three members "cautioned that postponing policy firming for too long could push the unemployment rate markedly below its longer-run normal rate over the next few years." Those dissenters were Esther George, Loretta Mester and Eric Rosengren.

The trio warned that the Fed "might then need to tighten policy more rapidly, thereby posing risks to continued economic expansion."

Some other members highlighted the increase in the labor force participation rate and made a case that labor market "slack was being taken up at only a modest pace," allowing the Fed to act deliberately.

[freedom1st]

Yellen got em to wait until after the election to raise rates. Yellen is nothing more than a political hack.

[CincyRichieRich]

B.s.. they know what they are doing. Scorched earth starts Nov 10-Jan 20.

Any rate increases without accompanying tax cuts crushes the economy and chaos ensues and verrrry quickly, a la 1929 and then some. That is the time Obama and the establishment like Ryan may go along with martial law to retain power.

[Zakeet]

It ain't gonna happen!

Have you considered what increased interest rates would do to the bond markets ... stock markets ... foreign exchange rates ... corporate earnings ... the economy ... the government's deficit? Do you remember what happened last December when the morons goosed them a whopping quarter of a percent higher?

The Fed Bozo's have caught themselves in a trap from which they can't escape without a system reset (i.e. depression). They know this. Investor's Business Daily knows this. Most smart money knows this.

Fed sponsored propaganda such as this article is nothing more than a pile of bull crap.

[expat_panama]

A very happy Thursday the 13th to all!  Yesterday's stocks were flat in lessening trade and IBD's "Big Picture" has our 'market under pressure' distribution count at 8 or the S&P (very bearish).   Futures see more stock losses, likewise w/ metals as gold & silver continue on that lower support level that we had back in the first half of this year.

Econ reports today include the unemployment claims:

12:00 AM Crude Inventories
8:30 AM Initial Claims
8:30 AM Continuing Claims
8:30 AM Export Prices ex-ag.
8:30 AM Import Prices ex-oil
10:30 AM Natural Gas Inventories
11:00 AM Crude Inventories
2:00 PM Treasury Budget

News---

A Federal Reserve Divided Against Itself - Mohamed El-Erian, Bloomberg
Dissent Is Growing Inside the Janet Yellen Fed - Chris Matthews, Fortune
Is Fractional Banking Benign? Tamny vs. Herbener - Tom Woods, TWS

--and FR econ threads:

• The Out-Of-Control Consumer Financial Protection Bureau Gets Its Wings Clipped
• Inequality Is Still the Defining Issue of Our Time [TPP/TRADE IS UNEQUAL]
• Fed Hawks Are Gaining Sway, September Meeting Minutes Show

[expat_panama]

LOOVE THAT PIC!!!!

[WhoisAlanGreenspan?]

Is the guy on the right an infantryman?

[babble-on]

25 bps in Dec is baked in.

[Original Lurker]

I personally heard Herman Cain mention how politicized the Fed
has become. Herman used to be on the KC FR Board of Governors.

He should know!

[moovova]

Well, with the economy overheating the way it is...

/s

[citizen]

Yellen got em to wait until after the election to raise rates.

---

Janet saved the hike as a welcome present to the new President Trump. Isn't she wonderful??

[citizen]

Verizon to Close Call Centers in 5 States
http://www.foxbusiness.com/politics/2016/10/13/verizon-to-close-call-centers-in-5-states.html
Those jobs are probably moving to Bangalore.

[Tilted Irish Kilt]

citizen :" Verizon to Close Call Centers in 5 States "

In New York , the home of Verizon Corporate Offices, Verizon is the State's largest single employer.
A few months ago, New York States Governor, ('Little hands Andrew') called for a $15.00 per hour, minimum wage throughout the state.
And now Verizon is leaving the State ! Any Correlation ?
I think so ...