When
it comes to the Fed's next rate decision, the market has made up its
mind: as of this morning, the fed funds futures market is pricing in a
probability of 91% that the Fed announces another 25bps rate cut at 2pm
on Wednesday, with odds of no cut at just 9%.
So certain are strategists that the Fed will deliver another
"insurance" cut - the third in a row - that discussion has now firmly
shifted to what the Fed will do in its next, December, meeting with the FT writing that
the "Federal Reserve faces the thorny decision of whether to signal an
interruption to its monetary easing after it delivers what is widely
expected to be a third consecutive cut to its main interest rate this
week."
If the Federal Open Market Committee presses ahead with a new rate
reduction on Wednesday afternoon, it will have already notched up 75
basis points of monetary stimulus this year — and to some economists and
Fed officials that should be sufficient to accomplish the goal.
Needless to say, the prevailing consensus is that Powell will cut,
with Scott Anderson, chief economist at Bank of the West, summarizing it
best: "I think they will end up cutting another 25 basis points [this
week] and then pause for the rest of this year."
言うまでもなく、すでに市場合意はPowell が金利引下げを行うだろうというものだ、Bank of the WestのチーフエコノミストScott Andersonが状況をこうまとめる：「私の見解では、今週の２５BP切り下げでお終いにするだろう、そして年内は金利引下げは休止となるだろう。」
Yet not everyone agrees.
ただし、だれもがこれに同意するわけではない。
According to Jefferies money-market economist Thomas Simons, the
headwinds that pushed the central bank to cut rates in July and
September have "abated somewhat" as U.S.-China trade tensions and
Brexit uncertainty have also diminished, while the gap between the Fed’s
policy stance and that of other central banks has narrowed.
Thomas SimonsのマネーマーケットエコノミストJefferiesによると、７月や９月のような中央銀行金利引下げを要求する向かい風は「幾分和らいでいる」というのも、米中貿易係争やBrexit不確実性は弱まっており、一方でFED政策スタンスと他の中央銀行のスタンスが狭まっているのだ。
As a result, Simon takes on the wildly contrarian view that the Fed
will keep rates unchanged this week while leaving a December cut on the
table; in doing so, the Fed would spark a "temper tantrum" in markets, while pushing back against aggressive Fed pricing and cement the idea of a mid-cycle policy adjustment.
"If they continue with so many consecutive rate cuts, they
can never break the cycle of market expectations thinking more are
coming,” Simons said in a Bloomberg interview, adding that "it’s
time for the Fed to take a step back and see if the prior cuts are
going to have an effect before moving forward with another one." 「もしFEDがこれだけ何度も連続で金利引下げを行うと、今後は市場の要求が更に高まりそれに抗することができなくなってしまう、」とSimonsはブルームバーグのインタビューで答えた、更にこう加える「今やFEDは一旦立ち止まるべきときであり、さらなる金利引下げを行う前にこれまでの一連の金利引下げの効果を確認すべきだ。」
Holding fire on more rate cuts will likely have the added benefit of
further steepening the yield curve, a critical condition for US banks to
return to profit growth: with yields on the short-end depressed thanks
to the Fed's "Not QE", which will soon spill over from purchasing merely
Bills into the 2Y (if not longer maturity) sector, longer-dated yields
will likely jump should the Fed surprise markets by not cutting rates in
48 hours. This would serve to further steepen the 2s10s yield curve,
which after inverting briefly in August is back to level last seen at
the start of the year (here we ignore the discussion that it is the
re-steepening of the yield curve following an inversion that is the true
recession signal, as it is a topic we have covered extensively in the
past).
Helping the steeper yield curve is the recent rise in 10-year
Treasury yields which printed a six-week high of 1.86% on Monday as
President Trump touted trade progress and the EU granted the U.K. a
three-month Brexit delay. Meanwhile, rates on 2-year Treasuries climbed a
more modest 3 bps.
To be sure, it is unclear if Powell would be willing to risk a market
tantrum just to prove that he is not at the mercy of the market. As
Jefferies points out, a knee-jerk response to the Fed standing pat would
likely see U.S. stocks sink and the yield curve “twist." Or, as
Bloomberg explains, "while the Fed’s bill purchases and lower inflation
expectations should continue to suppress short- and long-dated yields,
3- to 7-year Treasuries may sell off, he said."
"There will be a little bit of a temper tantrum, but I think the volatility will be short-lived,” Simons said. “Stocks won’t like it, but it isn’t exactly going to set off a prolonged sell-off." 「こうなると癇癪発作の可能性は低く、ボラティリティは短期的なものになると私は思う、」とSimonsは言う。「株式市場はこうはならないだろう、しかし先延ばしされた下落がすぐに始まるというわけでもない。」
There is another reason why Simons' view is in the minority: as the
FT noted over the weekend, the drumbeat of relatively soft economic
data, and fears of a negative market reaction, could make Mr Powell and
other Fed policymakers wary of indicating that this round of “insurance”
cuts is already over. Furthermore, the latest truce in the US-China
trade war is only tentative, and even if it is signed by Trump and Xi
Jinping, in Chile next month, many of the tariffs and the tensions in
transpacific trade are set to linger.
"The Fed runs the risk of an unnecessary tightening of financial
conditions. We are hopeful that Chair Powell avoids such a mistake,"
said Natixis economist Joe Lavorgna.
As such, whereas most dismiss Jefferies' suggestion, all will be
focused on whether the FOMC statement changes it pledge to "act as
appropriate to sustain the expansion" widely seen as an indicator of
future rate cuts, to wording that appears less committed to further
easing.
“Keeping the forward guidance as is is the path of least resistance.
If they take it out they are being unintentionally hawkish,” said
Michelle Meyer, an economist at Bank of America Merrill Lynch. “The data
now is softening so I think they have to give some nod in that
direction.”
Boosting the dovish case, it is likely that just hours before the
Fed's announcement, the US will announce that Q3 GDP rose just 1.6%,
which would be the slowest pace so far this year; In fact, since the
Trump election, there has been just one quarter of GDP growth below 2%,
and analysts will be looking out for what this might mean for the
economy heading into next year’s election. And then there is the October
US jobs report on Friday, where consensus expects a paltry +90k print
following the previous month’s +136k increase. If accurate, that
would be the weakest pace of monthly jobs growth since May but the
recent GM strike complicates the analysis with a 46k hit expected from
this. Explanations aside, however, Trump will be sure to put
the squeeze on the Fed to cut rates even more after such a poor number,
and for Powell the question will be whether he wishes to do so after he
has just cut again for the third time, or after giving himself some
breathing space by not cutting rates this week, even if it means a
modest "tantrum."
While it is unknown what Powell will decide on Wednesday, the best
summary of the choices facing the Fed chair comes from the former head
of the NY Fed's market team, Brian Sack, who is currently director of
global economics at DE Shaw, and who two weeks ago told an Institute of International Finance conference that "we either stabilize with one more cut, or I think we’re going to go all the way to the lower bound." 水曜にPowllがどういう結論を出すかはわからないが、FED議長の直面する状況に関して、前NYFED市場チーム主任のBrian Sackは考えを述べている、彼は現在DE Shawの世界経済取締役だ、その彼が二週前にInstiture of International Finace 会議でこう述べた「我々は皆もう一度の金利引下げによる安定化を求めている、もしくは私自身はさらなる金利引下げをだ。」
The problem for the Fed is that even if it cuts on Wednesday, the probability of a quick "stabilization" is virtually nil,
for one simple reason: China refuses to join the global reflation
party, which has resulted in its credit impulse barely rebounding from
cycle lows.
FEDにとっての問題はたとえ水曜に金利引下げをしたとしても、直ちに「安定化」する可能性は殆どないということだ、シンプルな理由の一つが：中国は世界的なリフレ騒ぎに参加を拒んでいる、その結果中国のクレジットインパルスは今サイクル底からほとんどリバウンドしていない。
As long as Beijing refuses to lend a helping hand to the global
reflation effort, it will be up to the Fed. And should Powell use up his
last "insurance" cut for nothing - because after three cuts as Sack
said, the Fed will likely have no choice but to cut all the way to zero,
something which Rabobank predicted some time ago, the Fed chair will have no choice but to capitulate.
And, as an added consideration, this will be Trump's preferred
outcome, because what better way to ensure that the S&P is at all
time highs and the US economy avoids recession ahead of the Nov 2020
election, than the Fed cutting rates to 0% by December 2020.
Well, with "Not QE" already active, and the Fed out of ammo when it
comes to more rate cuts, what happens in 2021 will depend on one simple
choice: will the Fed follow Europe and Japan into negative rates, or
will the long delayed recession finally arrive.
現在のCPI推移をみるとFEDの言う２％目標に収まりそうにはありません。実際現在の金利政策はまだ緩和的で、政府の大判振る舞いもあり、M2はコロナ騒動以前のトレンドを大きく超えたまま漸増し始めています。大統領選挙もあり、パウエルは今後利上げはないと言明しており、利下げ期待が高まっています。 In Gold We Trust 2024（２０ページ目）では１９７０年代のインフレ推移と現在２０２４年のインフレ推移を重ね、もっと大きなインフレがこれから来そうだと示唆しています。 https://ingoldwetrust.report/in-gold-we-trust-report/?lang=en 当時は数年間でゴールド価格は７倍になりました。直近のCPIのピーク値と比べると、今回は次のピーク、今後数年、でゴールドが５倍程度になることが期待されます。 ミシガン大学の調査ではインフレがFED目標の２％に落ち着くと期待されず、最近では期待値が増え始めています。
Global Warming Fraud Exposed In Pictures by Tyler Durden Tue, 10/01/2019 - 12:25 Authored by Mike Shedlock via MishTalk, Climate change alarmists have convinced the public something must be done now. The reports are easily debunked as fraud ... 気候変動主張者たちは今行動を実行せねばと確信している。その手の報告書はでたらめだということが簡単に解る・・・・ My Gift To Climate Alarmists 気候変動活動家への贈り物 Tony Heller does an amazing job of showing how the fraud takes place in his video entitled My Gift To Climate Alarmists. Tony Heller は素晴らしい仕事をした、このビデオを見ると彼らの主張が如何にでたらめかということがよく分かる、そのタイトルは My Gift To Climate Alarmists。 The video is only 12.51 minutes long. このビデオはわずか１２．５１分しかない。（訳注：画像・動画がいっぱいで英語がわからなくても理解できる） Cherry Picking 例を上げると Heatwaves increasing since 1960 熱波発生は１９６０年以降増えているという Arctic ice declining since 1979 北極海氷は１９７９年以来減っているという Wildfires increa...
