Fed Says Nothing New, Just Repeats One lie

Mish

The Fed held interest rates at 0-25 basis points at today's FOMC meeting as everyone expected. It did emphasize one lie.

Full Range of Tools and Lies

Here is the Federal Reserve FOMC statement.

The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.

The coronavirus outbreak is causing tremendous human and economic hardship across the United States and around the world. The virus and the measures taken to protect public health are inducing sharp declines in economic activity and a surge in job losses. Weaker demand and significantly lower oil prices are holding down consumer price inflation. The disruptions to economic activity here and abroad have significantly affected financial conditions and have impaired the flow of credit to U.S. households and businesses.

The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term. In light of these developments, the Committee decided to maintain the target range for the federal funds rate at 0 to 1/4 percent. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.

The Committee will continue to monitor the implications of incoming information for the economic outlook, including information related to public health, as well as global developments and muted inflation pressures, and will use its tools and act as appropriate to support the economy. In determining the timing and size of future adjustments to the stance of monetary policy, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

To support the flow of credit to households and businesses, the Federal Reserve will continue to purchase Treasury securities and agency residential and commercial mortgage-backed securities in the amounts needed to support smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions. In addition, the Open Market Desk will continue to offer large-scale overnight and term repurchase agreement operations. The Committee will closely monitor market conditions and is prepared to adjust its plans as appropriate.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Patrick Harker; Robert S. Kaplan; Neel Kashkari; Loretta J. Mester; and Randal K. Quarles.

No New Information, One Repeated Lie

There is no new information in the FOMC statement, nor any new policies or procedures. Everyone understood that Covid-19 will heavily weigh on activity.

The lie regards the Fed's alleged "symmetric 2 percent inflation objective".

The Fed is quick to cut and slow to hike. It has blown three consecutive bubbles by not understanding what inflation really. 

Third Major Transfer From the Middle Class to the Wealthy

The Third Major Transfer From the Middle Class to the Wealthy is underway. 

Too Big to Fail

Suddenly Carnival Deemed Too Big to Fail, Rescued by the Fed

No Junk Debt Is Too Risky

For the explicit benefit of the wealthy to the detriment of everyone else, No Junk Debt Is Too Risky: Thank You Fed.

Regardless of what they say, the Fed's new junk bond "tool" is now permanent.

Always remember, There Are No Temporary Measures, Just Permanent Lies.

Did you expect any different?

Mish

Comments (32)
No. 1-14
lol
lol

$8 trillion in bailouts and stimulus in 2 months ,main street cut......$1200 and a" promise " to help small business lol!

Maximus_Minimus
Maximus_Minimus

0-0.25%, just like their credibility, then.

TimeToTest
TimeToTest

What they are doing is working perfectly.

S&P broke major a resistance level today. Next stop is well over 3k.

States are opening back up and the virus is trending out of the news cycle.

Time will tell what the next move is. Heaven knows I am out of predictions.

Tony Bennett
Tony Bennett

Well, at least for now, no increase to IOER.

In current environment - great reticence on banks to lend - would have been pure welfare for Wall Street.

Jdog1
Jdog1

Translation :

We are really not doing anything new because there is nothing we can do. We will continue to do what we were doing despite the fact it was not working and the economy was heading for recession before the Virus problems started.
The shutdown of the economy and the bumbling attempts by Congress to get save their jobs in an election year will result in this thing being much worse and lasting longer than it would have had Congress done nothing.
Both the economy and the market will crash, and you guys are basically screwed.
Oh and have a nice day....

Sechel
Sechel

Fed is wasting its time. The best way to get the economy back on track is to get it under control with vaccines, testing and mitigation. If employees get laid off they should get unemployment. Anything more is basically causing more harm than good.

Zardoz
Zardoz

magoomba
magoomba

Looking at the fed's statement, it's clear to see that the only hiring the fed is doing is people with PhDs in SEMANTICS.
The only tool is the 'printing' press, mostly robotic by now.

magoomba
magoomba

Just can it and gimme my free shit.

Schaap60
Schaap60

Mish, it seems the Fed Uncertainty Principle is back in play. Is there possibly a new corollary are is all of this covered by the existing ones?

JohnB99
JohnB99

Wonder how long it will take for the FED to see the effects of their actions begin to reach the middle and lower class this time.

15, 20 years?

aqualech
aqualech

What do you people think....
Is the Fed intentionally forcing everyone into the stock market, and if so, what are the sellers, presumably profit-takers, buying instead?
or
Is this ZIRP only to make it easier for otherwise non-viable entities (public and private) to roll their debt and keep debt service low? The whole issue about where to find a store of wealth for savings then being an unavoidable consequence>?

TumblingDice
TumblingDice

Why the 3 card monty.
Why doesn't the FED just say the FED Funds rate is 0?

RonJ
RonJ

"The Fed is quick to cut and slow to hike. It has blown three consecutive bubbles by not understanding what inflation really. "

I don't think the FED cares what inflation is. Money is created out of debt, which involves interest expense. It's like that Ponzi scheme that keeps going until they run out of greater fools.


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