Fed lineup for 2016

pmbug

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Lulz... Rickards latest piece is all about how the Fed is moving towards negative rates and needing to cut...
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Certainly a rate hike, which I think is completely off the table for the foreseeable future, would be just the thing to take the stock market down 20%.

If that happens it’s going to be extremely destructive of confidence.

It’s going to be the opposite of what the Fed wants. It’s going to be deflationary, it will increase savings, reduce spending and reduce the volatility of money.
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http://dailyreckoning.com/inside-the-fed-tool-kit/
 

11C1P

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This whole rate hike forecasting is becoming like a soap opera or an evening drama when everyone watching knows eventually so and so are going to fuck, but what they get to it already!
 

pmbug

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Files in the "no shit, Sherlock" category:
Three of the Federal Reserve’s own primary dealers are warning bond traders that a growing consensus the central bank will raise interest rates by year-end is misguided.

While none of the 23 banks that trade with the Fed expect a hike at the conclusion of Wednesday’s meeting, HSBC Holdings Plc, Royal Bank of Canada and Royal Bank of Scotland Group Plc remain steadfast that policy makers will choose to hold off on raising rates at the Fed’s Dec. 14 meeting as well.
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http://www.bloomberg.com/news/artic...primary-dealers-warn-hikes-on-hold-until-2017
 

rblong2us

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last time they tried to raise interest by a tiny amount the markets swooned and when someone calculated how much 'money' has to be removed from the system it seemed obvious that the fed are trapped.

Any Dec raise will only be short term as we approach an admission that there really is a recession and 'we think we ought to cut interest rates'

A charade because they really are trapped.
 

pmbug

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Might need to amend the thread title...
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Trump was critical of the Fed during the presidential campaign, at one point charging that its low interest rates were fomenting a “big, fat, ugly bubble” in the stock market. He also complained that the central bank had been more political than his Democratic opponent, Hillary Clinton -- a charge that Fed Chair Janet Yellen repeatedly denied.

With two slots vacant on the Fed’s seven-seat board, Trump will have an opportunity to nominate monetary policy makers more to his liking when he takes over as president in January. He’ll also have a chance to pick a new chairman and vice chairman in 2018, when Yellen’s term and that of her deputy, Stanley Fischer, expire.
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http://www.bloomberg.com/news/artic...ed-to-shrink-balance-sheet-as-debt-wall-looms
 

pmbug

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To recap, that makes five of Trump’s people on the Board of the Federal Reserve:

– Two vacancies from the Obama administration that he’ll fill with Republicans.

– One more vacancy on the way with Fed Governor Daniel Tarullo resigning.

– Republican Fed Governor Jay Powell will remain

– A nomination to replace Janet Yellen when her term is over in January.

But it gets even more interesting…

Six months after all of that, on June 12, 2018, Federal Reserve Vice Chairman Stanley Fischer’s term ends. That marks a sixth appointment that Donald Trump will be in charge of. And it’s entirely possible that Fischer decides to leave early because of the radical changes happening around him.

The conclusion?

By this time next month, Donald Trump could have three selections made with a republican already in place.

By the middle of summer 2018, he should have six.
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And if all goes accordingly, President Trump will have control of six or even seven seats on the Federal Reserve Board by the summer of 2018.

Trump will own the Fed. Meaning, whatever the president wants monetary policy to be, he’ll get.

That’s the easy part…

The hard part is figuring out what President Trump wants.
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More: https://dailyreckoning.com/donald-trump-owns-fed-dollar-gold/
 

pmbug

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... on Wednesday morning, Sept. 6, Fed Vice Chairman Stanley Fischer unexpectedly announced his resignation effective almost immediately. ...

But this resignation now means that four of the seven Fed board seats are now vacant.
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Finally, last Wednesday afternoon, Sept. 6, the White House leaked to Axios that Gary Cohn, Trump’s top economic adviser and the former chief operating officer of Goldman Sachs, was out of the running to replace Janet Yellen. This also confirms what I said months ago, that Kevin Warsh is the likely next chair of the Fed.

Warsh has previously served on the board. After being nominated by President George W. Bush he was a Fed governor where he served from 2006 until he resigned early in 2011.

This is a complete changing of the guard. The old guard represented by Yellen and Fischer are leaving. A close associate of the old guard, Lael Brainard, has admitted publicly that the Fed models are broken and they have no idea what they are doing.

Kevin Warsh and a group of new appointees vetted by Warsh will be the new guard before the end of this year. They are pragmatists, not ideologues like Yellen.

Brainard is right about one thing. Disinflation is a serious problem for a country with a 105% debt-to-GDP ratio. Inflation is needed for the U.S. to have any hope of getting the debt problem under control. This means government theft from savers and negative real rates. Warsh and the pragmatists understand this.

Warsh believed that the Federal Reserve should have raised interest rates a long time ago. But with disinflation a much more pressing concern than inflation right now, being a pragmatist means he won’t commit to tightening if conditions don’t warrant it.

You should expect lower real rates, slower balance sheet normalization and higher inflation than markets are now pricing. This will not happen all at once, but in stages over the next year.
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https://dailyreckoning.com/momentous-72-hours-fed-history/
 

rblong2us

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Yeah , I read that article and found myself wondering if it actually made any difference.

Even if Trump would like to be fiscally responsible, his hands are tied and its clear that he is now doing what he is told, rather than pursuing his policies as laid out during the election.

Debt ceiling doesn't really matter .....
No choice but to keep printing .....

Just talking heads, apparently eager to please the president .....
 

pmbug

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I think the most notable issue is that there may be a change in policy/thinking/direction for the Fed depending upon who the next chair will be. I'm pretty sure that Trump really isn't making those decisions and is a non-story in this, but if the current members have admitted that their models aren't working and they don't really know what they are doing, the situation is ripe for a strong personality/voice to chart a new course. That could be good or bad, obviously.
 

11C1P

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Seems like a good time to put an end to the fed then. Just don't fill anymore seat & let it die that way would work too I guess.
 

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President Trump says he is considering three main candidates to lead the Federal Reserve Board.

In an interview on Fox Business Network's "Mornings with Maria" set to air Sunday, Trump said he is considering Federal Reserve Governor Jerome Powell, Stanford University economist John Taylor and current Fed Chairwoman Janet Yellen.
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Reuters had reported the day before that White House National Economic Council Director Gary Cohn and former Fed Governor Kevin Warsh are also under consideration to chair the Fed.
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http://thehill.com/homenews/administration/356449-trump-identifies-three-candidates-for-fed-job

edit: This link provides more background on all the candidates:

http://www.businessinsider.com/trump-fed-candidates-final-5-2017-10
 
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