Un-F'ing believable as Evans went uber-dove last night at 10 and sent the global markets (and our Futures) flying higher.
Fed’s Evans: U.S. Might Not Hit Target Inflation Rate Until 2018 - Federal Reserve Bank of Chicago President Charles Evans said Wednesday the U.S. might not hit the Fed’s target inflation rate until 2018 and he doesn’t advocate raising interest rates until 2016.
There's also this spin on the Fed Minutes:
Today, in the minutes to that meeting, we learned in fact that “many participants regarded the international situation as an important source of downside risks to domestic real activity and employment.” But we were also told that although “some participants had lowered their assessments of the prospects for global economic growth, several noted that the likelihood of further responses by policymakers abroad had increased.” In other parts of the statement, too, there were references to “market participants’” expectations that European monetary policy would be eased.
Thus, what is widely thought to be the FOMC’s consensus view – that a sovereign bond-buying form of quantitative easing from the ECB is desirable, because it would offset the liquidity-crimping effect of its own plans to tighten in U.S. monetary policy in the months ahead – was expressed as the expectations of faceless “participants.” The Fed can’t be accused of meddling in a foreign country’s sovereign policy concerns, but at the same time the message seems clear that if the ECB doesn’t act, many U.S. central bankers believe they could be left in a difficult situation. The question now is: What impact will this extremely subtle message have on the ECB, at its own, hotly anticipated policy meeting on Jan. 22?
So, it's the same old BS where now we are all going to spend two weeks anticipating all the possible ways Draghi can save us all by waving his monetary magic wand – even though the Fed is not actually doing anything new.
We'll see if the strong bounce lines stick now, but I'd take it with a huge grain of salt when we get there on more of this idiocy. Of course, you can fool some of the people all…
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