WASHINGTON, June 15, 2016 – The Federal Open Market Committee (FOMC) made its widely-expected non-proclamation Wednesday afternoon, announcing no interest rate increase for the month of June. On the other hand, this afternoon’s statement still strongly suggests that at least a pair of interest rate increases remain on the table for 2016. Maybe. Or maybe just one. Experts think the answer might be none.
According to a just-released quick analysis on CNBC, the Fed still feels a need to raise those rates. But once again, the nation’s central bankers are hedging their bets due to the increasing possibility of a UK vote next week that’s expected to force a British exit from the European Union, aka the “Brexit.” That should cause plenty of market turmoil for starters.
But the Fed is also apparently being forced to acknowledge what everyone in Flyover Country already knows. In technical terms, America’s now “fundamentally changed” non-economy is floundering again, unable to make real headway on the jobs front even as the Obama Administration waves its phony figures in front of an increasingly skeptical, and increasingly unemployed electorate.
As a result of the dollar weakness, gold caught a bid this afternoon, attempting to regain its classic status as a hedge not only against inflation and currency risk, but also against a highly uncertain world political and social situation.
As one might expect, the Two Tylers over at Zero Hedge, along with their pals, are taking a cynical view of today’s expected non-decision:
“While The Fed is a ‘motivated rate raiser,’ it appears that they are losing confidence in their growth forecasts, which means, as Goldman Sachs notes, another downgrade to the long run rate tomorrow, bringing the cumulative reduction in the Fed’s tightening cycle over the past year to 75 bps. There is a good chance the market will see this as a signal to sell the Dollar, on the grounds that the Fed will look increasingly uncertain over the medium-term trajectory of policy.
“It appears the dollar is starting to [be] sold on this expectation…
“[Today is] FOMC day, and against what Bloomberg’s Richard Breslow is sure is their most fervent wish, they will have to issue a statement and the Chair manage a press conference, adding that he ‘suspects it’ll be an exercise in conditional statements worthy of the best freshman logic class.'”
(Bold text via Zero Hedge.)
We’d emend Breslow’s final observation here with regard to “freshman logic class.” As a tool of white, male, European patriarchy, we highly doubt that U.S.-based freshmen in 2016 are learning any logic at all, a fact made obvious when you see how many of these ignorant snowflakes insist on Feeling the Bern. Plus, the use of logic and reason interferes with “The Narrative.”
We’ll keep it short today. Wednesday Fed announcement days tend to be slippery affairs, market-wise, so we’ll wait until the smoke clears and come running back to our trusty computer tomorrow to see if we can put some of these puzzle pieces together to give us some clue as to what kind of market moves we might want to make next, as the plot sickens….
UPDATE: All averages ended the day down again, off roughly 0.2 percent, making it 5 negative days in a row. We may be getting close to another oversold bounce, but Wednesday’s action looked pretty miserable to us.