{"id":456882,"date":"2017-03-18T14:00:32","date_gmt":"2017-03-18T14:00:32","guid":{"rendered":"http:\/\/juniorminingnews.com\/?p=456882"},"modified":"2017-03-18T14:00:32","modified_gmt":"2017-03-18T14:00:32","slug":"wednesdays-rate-hike-was-really-a-rate-cut-2","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=456882","title":{"rendered":"Wednesday\u2019s Rate Hike Was Really a Rate Cut!"},"content":{"rendered":"
<\/a><\/div>\n

By Brian Maher<\/a><\/span> <\/p>\n

<\/div>\n

This post Wednesday’s Rate Hike Was Really a Rate Cut! appeared first on Daily Reckoning.<\/p>\n

Auntie Janet pulled it off this week\u2026 a 0.25% rate hike this Wednesday.<\/p>\n

But the markets saw no evil\u2026 and heard no evil. The Dow ripped over 100 points Wednesday alone. It slipped about 20 yesterday. But that’s just noise.<\/p>\n

Yet Goldman’s chief economist, Jan Hatzius, said something yesterday we just can’t shake out of our hair\u2026<\/p>\n

He says the market completely misinterpreted Yellen’s hike. It wasn’t supposed to be the \u201cdovish surprise\u201d the market took it as.<\/p>\n

Someone asked if Hatzius thought that was Yellen’s plan. \u201cNo, almost certainly not,\u201d came the reply. More:<\/p>\n

We feel quite confident that they were not aiming for a large easing in financial conditions. After all, the primary point of hiking rates is to tighten financial conditions, perhaps not suddenly, but at least gradually over time.<\/p>\n

So Yellen held up a stop sign but the markets busted right through it, giving her a good old razzing as they raced on by.<\/p>\n

And to prove it, Goldman’s Financial Conditions Index, \u201ceased sharply, by the equivalent of almost one full cut in the federal funds rate.\u201d<\/p>\n

That is, says Zero Hedge’s \u201cTyler Durden,\u201d \u201cthe Fed’s 0.25% rate hike had the same effect as a 0.25% rate cut!\u201d<\/p>\n

The hike was nothing but a costumed rate cut, according to this view.<\/p>\n

Remarkable!<\/p>\n

But Hatzius thinks that means old Janet will be laying down the law next time:<\/p>\n

\u201cThe [Fed] will lean against this and will deliver more monetary tightening than discounted in the bond market.\u201d<\/p>\n

Maybe he’s right. A lady needs respect after all.<\/p>\n

But we also learned yesterday that the real economy might not be in any position to take any more monetary tightening\u2026<\/p>\n

On Monday we pulled Yellen’s whiskers thus:<\/p>\n

\u201cThe Atlanta Fed has slashed its projected first-quarter GDP growth from 1.8% to 1.3%. That same Atlanta Fed guessed 2.5% just two weeks ago. What will it be two weeks hence?\u201d<\/p>\n

Well, on Wednesday the Atlanta Fed’s GDPNow estimate for first-quarter GDP growth came out again\u2026<\/p>\n

And sure as sugar, it’s been revised down from 1.3%\u2026 to 0.9%. Recall the projection was 2.5% less than three weeks ago.<\/p>\n

And just what will it be two weeks from now?<\/p>\n

It could be the weakest quarter of economic growth with a rate hike since 1980\u2026 when Paul Volcker was busy raising rates to 20%.<\/p>\n

Meanwhile, the University of Michigan’s Richard Curtin notes that \u201creal people’s\u201d medium-term inflation expectations have also collapsed to their lowest level since 1980.<\/p>\n

Inflation expectations over the next five years now weigh in at annual rate of 2.2%, according to Curtin. That’s down from 2.5% last month\u2026 and 2.3% in December.<\/p>\n

What about all that inflation-stoking stimulus?<\/p>\n

Meanwhile, the stock market just keeps on whistling by, footloose, fancy-free. But gandering all the other sour data coming in, we just wonder if it’s whistling past the graveyard\u2026<\/p>\n

Regards,<\/p>\n

Brian Maher
\nManaging editor, The Daily Reckoning<\/p>\n

The post Wednesday’s Rate Hike Was Really a Rate Cut! appeared first on Daily Reckoning.<\/p>\n

\u2026read more<\/a> <\/p>\n

Source:: Daily Reckoning feed<\/a><\/p>\n

The post <\/a>Wednesday’s Rate Hike Was Really a Rate Cut!<\/a> appeared first on Junior Mining Analyst<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Brian Maher This post Wednesday’s Rate Hike Was Really a Rate Cut! appeared first on Daily Reckoning. Auntie Janet pulled it off this week\u2026 a 0.25% rate hike this Wednesday. But the markets saw no evil\u2026 and heard no evil. The Dow ripped over 100 points Wednesday alone. It slipped about 20 yesterday. But […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/456882"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=456882"}],"version-history":[{"count":0,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/456882\/revisions"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=456882"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=456882"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=456882"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}