Submitted by Lance Roberts via RealInvestmentAdvice.com,
The Fed Is Behind The Curve…Again
Over the last couple of months, I have been discussing the technical deterioration of the market that is occurring beneath the surface of the major indices. I have also suggested there is more than sufficient evidence to suggest we may be entering into a more protracted “bear market cycle.”
The Fed may "seriously consider" negative rates after moving rates back to zero, reintroducing forward guidance and making "stronger pleas" to Congress for fiscal policy action as there are complications for money markets, according to BofAML strategist Mark Cabana.
This would not be a total surprise as Mises Institute's Joseph Salerno warns recent Fed commentary suggests they want to test-drive negative interest rates...
While market volatility remains so high it leaves many trading desks speechless by "brutal" if obvious unwinds, and both institutional and retail traders clueless and at best hoping to ride the momentum wave in any direction before it violently reverses, one person who is a steadfast seller into any and every rally is BofA's chief investment strategist Michael Hartnett who in a note titled "Fed, dollar & the end of splendid isolation" explains just why with one simple chart, and further notes that he will continue to sell "at least until a coordinated and aggressive global policy respon
While everyone was focused on the "front end" of central bank announcements in the form of Draghi jawboning, Yellen hemming and Kuroda panicking, something more troubling took place on Monday afternoon on the "back end", when the FED released its latest quarterly senior loan officers survey.
What it showed was that in Q4, lending standards tightened for the second consecutive quarter.
Another day, another Goldman prediction fiasco, and no, we are not talking about the stop out of the firm's Top Trade for 2016, namely the long USDJPY, short EURUSD (although that should happen any minute) - we are talking about that perpetual permabull, Jan Hatzius, just admitting the economy is in far worse shape than expected (if only by him), and as a result he just "revised" his Fed rate hike call, no longer expecting a March hike, instead now forecasting that the first rate hike will be in June and "and see a total of three rate increases this year."