Wednesday, August 17, 2016

Finally Some Fed Hawk And Bubble Talk

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*After two big jobs numbers there wasn't much hawk talk from the Fed.
*William Dudley, NY Federal Reserve president finally had some hawkish things to say.
*Not that we believe it will happen but he said a Fed hike in September is a possibility.
*Mr. Dudley also commented on the bubble.
*We think his comments could have implications for what Fed Chair Yellen ends up saying August 26th which is much more of a market event.

We've been scouring the globe for some hawkish rate hike commentary after two big non-farm payroll numbers. The Fed's two key measures are PCE and non-farm payrolls. Non-farm payrolls blew past expectations in its recent report but there was not much of a Fed peep of an imminent rate hike. NY Fed President and vice chairman of the rate-setting Federal Open Market Committee William Dudley finally chimed in with some hikish (hawkish) things to say. We think that could have implications for Janet Yellen's speech Friday August 26th.
Here's what Fox Business News reported Mr. Dudley saying.
"We are edging closer towards the point in time when it will be appropriate to raise rates further." When asked whether a September rate hike was on the table Dudley said, "Yeah, I think it is possible".
He also said as reported by Bloomberg, Fed Funds Futures estimates are "too low" and that "the market is complacent about the need for gradually snugging up short-term interest rates over the next year or so."
Mr. Dudley is saying that the Fed Funds futures are not reflecting enough rate hikes.
First here's September's expectations for a rate hike.

Chaim Siegel has been working with hedge funds and mutual funds as an analyst and PM his entire career. Chaim specializes in earnings and predicts, analyzes and reacts to earnings and earnings events as well as developing current company stories with a hedge fund perspective. If you want his analysis real time sign up to the right for real time email alerts. #in, $spy, $qqq, $iwm, $vxx, $ycs, $fxe, $EUO, $YCS, ^GSPC, INDEXSP:.INX, #elazaradvisorsllc, CME Globex: ES Disclosure: These trades can lose you money and principal especially when using leverage BY USING THIS SITE YOU AGREE TO TAKE ALL RESPONSIBILITY FOR YOUR OUTCOMES AND LOSSES AND HOLD BESTIDEAS, ITS CONTRIBUTORS AND ELAZAR ADVISORS, LLC HARMLESS

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