Submitted by Axel Merk via Merk Investments,
"The Fed doesn't have a clue!" - I allege that not only because the Fed appears to admit as much (more on that in a bit), but also because my own analysis leads to no other conclusion. With Fed communication in what we believe is disarray, we expect the market to continue to cascade lower - think what happened in 2000. What are investors to do, and when will we reach bottom?
This is probably not what the bulls wanted to hear. Moments ago Goldman released its take on Yellen's testimony set to begin momentarily, and contrary from a dovish take the bank which has spawned more central bankers in world history than any other, said that her prepared remarks "suggest additional hikes remain FOMC baseline "
Goldman's full take:
Fed Chair Yellen's Prepared Remarks Suggest Additional Hikes Remain FOMC Baseline
Fed Chair Yellen will be presenting her semi-annual monetary policy testimony - sometimes called the "Humphrey-Hawkins" testimony - today (House Financial Services Committee) and tomorrow (Senate Banking Committee). Her prepared remarks offered little new information over the January FOMC Statement but the Q&A will likely be the most market-moving as politicians likely demand she "get back to work" for the good of the nation's shareholders.
Live Feed (testimony is due to begin at 10ET)
For a Yellen testimony which explicitly focused on "financial conditions" which have become "less supportive of growth" as one of the chief risks facing the Fed's rate hike philosophy, we were surprised to find that the list of troubling developments "related to financial stability" as laid out in the Fed's Monetary Policy Report to Congress which accompanies the chairwoman's testimony, was relatively sparse.
With algos not exactly enthralled by their initial several million reads of the key soundbites in the Yellen speech, they - along with carbon-based traders - are looking for guidance elsewhere. One place they traditionally go to is Fed mouthpiece Jon Hilsenrath, who unfortunately appears to be out of the loop lately, and the best he could do was underscore what the market already noted.