No Alien Invasion And No Rate Hike – Ep. 197

* Aliens didn't invade the Earth, and the Federal Reserve didn't raise interest rates

* If you remember, I was pegging the probability of each at roughly the same

* True to form, the Federal Reserve did pretty much exactly what I thought they were going to do and not raise interest rates

* Now I thought they might have tried to lower expectations for the probability in the markets of a December rate hike

* Even though they didn't say that, that was the effect of their announcement

* If you look at the dot plots, for example, the FOMC members were looking for rates to be lower for longer

* Surely, if you look at the reaction to the market, the market does not appear to be worried about a rate hike coming in either November or December, even though the Fed still maintains the narrative that the possibility still exists

* The Fed reiterated that the case for a rate hike had increased

* But, they chose not to raise rates despite their narrative

* Their reason was that they wanted to see more data

* This is exactly what I said after Yellen's statement at Jackson Hole

* The media interpreted her statement as a signal that a September rate hike was likely

* What did I say?

* I said the Fed didn't say anything about hiking

* They were speaking about the case for a hike

* I described it as a scale from, say 0 - 10

* If the case were a 3 and then it became a 4, the case had strengthened

* But if the Fed needs 10, and we're only at 4, they're not going to hike

* They never came clean about their scale, they simply said that the case for a hike had increased

* That doesn't mean they were going to raise rates, and that's exactly what happened

* It's interesting that in all of the prepared remarks and in the following press conference

* Janet Yellen never once admitted that the economy is weakening

* In fact, she continues to pretend that everything is great

* Ironically, one of the questions in the Q&A had to do with Donald Trump's position that the Fed is not raising interest rates for political reasons

* Which, of course is exactly why they're not raising them

* If they raise interest rates, everything would collapse, and so would Hillary Clinton's election prospects


Our Sponsors:
* Check out CigarBid and use my code GOLD for a great deal: https://cigarbid.com
* Check out Vanta: https://vanta.com/SCHIFF


Privacy & Opt-Out: https://redcircle.com/privacy