Gee, not too much of a shocker. The Fed cowered again and left rates at zero. Yesterday I outlined my reasons why I don’t listen to anything they say anymore, because they constantly violate their own statements and target conditions. It would be better for them to just keep their mouth shut. Or just say, “We’re keeping rates zero forever!! Woohoo!! Party on Wayne!!”
I’m finally just gonna say this is an absurd game. In my analysis yesterday I showed why inflation is clearly going to accelerate beyond the 2% Fed target.
The fact is, core inflation (which excludes energy and food since these are volatile) is what the Fed has always used to measure inflation and what the market focuses on too. Last month this was already 1.8% according to government official measures. Given the difference between target and actual is a measly 0.2%, and given the data I showed yesterday showing wage inflation is clearly accelerating, and given every other economic indicator (GDP, corporate profits, near record stock market still), one would think that the excuse of “we’re still below are target” is ridiculous. The Fed never, historically, looked at current inflation only, but rather current plus trending projections. This is clearly showing more than 2%. It’s pretty funny to watch this game of fear. It’s not like we’re at 2% or 3% rate already. We’re at zero!
I can’t believe the insanity and excuses. Just say it straight! You just don’t want to raise them – ever!!
Frankly it doesn’t matter what the Fed does intermediate term. And this day to day stuff is just noise. I study macro trends because they’re more predictable. Daily and weekly stuff is just like a casino. Logic and rationale takes a backseat to emotion 99% of the time.
When I was in Belgrade, Serbia, my favorite beer was called Yellen. The bottle had a picture of a deer with huge antlers. I think “yellen” means deer in Serbian.
Well, I think it’s fitting. Because Janet Yellen looks like a deer in the headlights. Filled with fear, but impotent and too frightened to make a decision or act. Paralysis nearly always kills the yellen.
Perhaps for Christmas someone should send Janet a nice red and white antler hat to go with that clown suit she wears with the insignia that reads: “Chairman of the reindeer Fed-eration”.
Long live lunacy!! Zero is the new Hero!!