Following yesterday's surprisingly hawkish minutes, the market held on to hope that either vice Chair Fischer, or former Goldmanite Bill "edible ipads" Dudley would provide at least some dovish counter to a Fed that suddenly has taken out all the wind from the market's sails. That did not happen earlier when Fischer refused to comment on monetary policy, while moments ago Bill Dudley deliver "Opening Remarks at the Economic Press Briefing on the U.S. Economy in a Snapshot" in which he repeated the broken record that the Fed remains data-dependent, adding that it is “important” for market participants and public to follow data along with FOMC and “to understand how we are likely to interpret and react” to it.
In other words, Dudley was looking at the reflexive relationship between the Fed and the market we showed several days ago...
... and is begging the market to stop selling off any time the Fed hints at tightening.
Of course, that will never happen, because not only does the market no longer discount any Fed-independent future, but is increasingly aware the Fed itself has no idea what is going on, and the moment the mere hint of more tightening emerges, everything is sold.
As Bloomberg adds, Dudley is the only Fed president with permanent vote on policy, has never dissented on FOMC decision.
"When asked about the trajectory for the monetary policy stance, I always point out that it is data dependent,” Dudley says in text of remarks Thursday at press briefing in New York. Data close to Fed’s expectations “have little additional impact” on central bank’s forecast; data that deviates significantly “can lead to more significant revisions” of forecast.
He added that the FOMC "calibrates" its monetary policy stance to achieve price stability and maximum sustainable employment, while taking into account forecast.
Transmission of monetary policy to economy through many channels “works best” when central bank is transparent about its strategy; in this case, market participants/public “understand and can anticipate actions by the central bank.”
Translation, the Fed has finally figured out the "Nightmarish merry-go-round" we profiled first earlier this week.
Finally, and confirming that the market clearly ignored everything Dudley said, the S&P just hit intraday lows following this headline:
- DUDLEY: JUNE IS DEFINITELY A LIVE MEETING
- DUDLEY: QUITE PLEASED WITH MARKET'S JUNE-JULY VIEWS
- DUDLEY SAYS BIGGER UNCERTAINTY IS WHAT'S GROWTH GOING TO BE
- DUDLEY: I'M PRETTY CONFIDENT WE'LL GET BACK TO 2% INFLATION
- DUDLEY: MKT PRICING OF FED HIKE ODDS WAY TOO LOW PRIOR MINUTES
Definitely live.... until the "economy" slides back under 2,000 of course, something the "economy" knows very well.