Once again we ask The Fed, "why now?"
Bloomberg's Consumer Comfort survey found 69% of people hads a negative view of the state of the economy, netting to the 30.6 print above - the lowest since November 2014... The perfect time to hike rates?
While the afterglow of exuberance remains in stocks, BofAML's Michael Hartnett is less than impressed by what comes next...
As Fed hikes rates for the first time in 3,460 days, officially ending the era of extreme, abnormal monetary policy in the form of QE and zero rates, what do we see?
Risk assets were very oversold going into the Fed hike...they now bounce.
But the Fed hike follows significant tightening of liquidity; negative blowback is more and more visible, e.g. credit crunch causing less stock buybacks.
Authored by Paul Craig Roberts,
What Does Today’s “Rate Hike” Mean?
The Federal Reserve raised the interbank borrowing rate today by one quarter of one percent or 25 basis points. Readers are asking, “what does that mean?”
Via Bryce Coward of Gavekal Capital blog,
As of today’s closing the S&P 500 index is quite literally in spitting distance of its all-time high as the markets cheered the first rate hike in a decade. Yet, as we noted here and here, most stocks are not quite acting as ebullient as one might expect given former.
Here is more evidence of just that. The below chart shows the average stock’s distance from its own 1-year high, which at 19% implies the average stock is just outside the threshold of being in a bear market.
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
The inescapable conclusion is that Fed policies have effectively crashed the velocity of money.
That the velocity of money has been crashing while the money supply has been exploding doesn't seem to bother the mainstream pundits. There is always a fancy-footwork explanation of why whatever is crashing no longer matters.