WASHINGTON, June 17, 2015 – The Federal Reserve’s Open Market Committee (FOMC) minutes were officially released on schedule Wednesday afternoon. Stock averages had moved from positive to negative prior to the announcement, but are now attempting to rally again amidst considerable volatility.
Today’s minutes put the final nail in the coffin of June interest rate increase speculation. Likelier target dates for that first increase since 2008 will now cluster around the September or December 2015 time frames.
From a negative 50 points the Dow has now spiked to 40+ points at of 2:16 p.m., but trading remains uncertain. The other averages have been making similar moves since the minutes were released.
The minutes take note of the allegedly falling jobless rate, but behind the scenes remain fully aware that the official government number does not represent the true U-6 figure which includes the systemically unemployed.
The FOMC employed its usual vague verbiage to keep their options open, noting, “The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.”
Bottom line, and no surprise to the average working stiff: wages remain largely stagnant, and the economy is barely growing, largely due to the continuing obstructions thrown at it by an administration bent on income redistribution and an out-of-control EPA that seeks to eliminate all fossil fuel use as soon as possible if not sooner, and damn however many jobs are lost in the process.
This continues to make the Fed nervous, although it’s never discussed publicly. Whatever recovery there has been is still remarkably fragile, and the Fed is still afraid to upset the apple cart too early. Likewise, the central bank is also looking to keep the international waters calm, given the increasing likelihood of default by an intransigent and belligerent Greek Communist government.
Aside from the steadily and hideously increasing cost of groceries for the average consumer, most other measures of inflation continue to be subdued.
We’ll assess the market situation further in tomorrow’s report.