Submitted by Michael Shedlock via MishTalk.com,
When Will the Fed Act?
Given the massive swing in rate hike sentiment following the disastrous jobs report last week...
...Inquiring minds may be interested in how economists saw thing about a month ago.
On May 12, the Wall Street Journal too a survey of economists on the question When Will the Fed Act?
Submitted by Charles Hugh Smith from Of Two Minds
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Bernanke blew it big-time, letting the "recovery" run seven years without any significant increase in rates.
For those who have been forced to trade the market, or provide trading recommendations, the past few months have not been kind: we have seen several instances in recent weeks where a trader lost it, where a strategist - one as prominent as SocGen's Albert Edwards - blew up and admitted "I'm Not Really Sure How Much More Of This I Can Take", and even a central banker went off the rails saying he and his peers are "magic people."
Yellen is still speaking in Philadelphia, but the attempts to set narrative and the market's own "reaction function" to what the Fed is saying are already taking place, case in point, Citi's Steven Englander who moments ago wrote that "Yellen expresses optimism throughout the speech but she doesn’t repeat her guidance from less than two weeks ago that a rate hike would be forthcoming “in coming months."
Will she or won't she? With an increasing number of market participants entirely confused by the Fed's utterly failed communications policy - as it constantly changes its focus from one meeting to another - Janet Yellen's speech today on the economic outlook and monetary policy at the World Affairs Council of Philadelphia seems critical just one week out from a supposedly "live" June meeting (who market-implied rate-hike odds are now just 4%).
Credibility crushed...
Headlines from prepared remarks: