The Fed is Just About Out of Lipstick!

Yesterday, San Francisco Fed President John Williams became the most recent addition to the list of Fed regional presidents continuing to promote interest rate increases before the end of the year, in spite of Fed Chair Yellen’s call for a slower rollout based entirely and exclusively on direct and positive economic response. Regional President’s Dudley, Lockhart and Rosengren have already chimed in, regarding their ongoing desire to increase interest rates as quickly and regularly as possible. However, the discourse with Yellen has the market chasing its own tail.
A further rate increase would provide no advantage whatsoever for the market or economy. As a matter of fact, the ongoing confusion created by the discourse between Yellen and the regional heads is the only reason for vacillation at all, in an otherwise catatonic stock market. The Fed’s only real reason to increase rates is to provide a fallback cushion, because the only fallback available at this point would take us back to zero interest. As much as an increase may be able to fortify Dollar value, it would be a far greater deterrent to the stock market and any form of economic improvement. It would be far more beneficial for the Fed to visibly and verbally get on the same page. Then they could acknowledge, address, and embrace the current condition, as Yellen appears to be attempting to do, rather than continuing to fuel this futile charade that everything’s alright, but results in nothing more than market masturbation with no chance of climax.
I believe that Yellen’s opinion and actions fall well short of the drastic and immediate needs of the U.S. economy. Just released FOMC meeting minutes indicate strong and renewed efforts to keep a potential interest rate increase in June, on the minds of everyone. It’s exactly what’s not needed. What we need to do is slow the swelling deficit and create jobs! None of this is being acknowledged, addressed, or demanded by the Fed or the government. So, we can only hope it was a major part of Yellen’s closed door meeting with President Obama last month and appropriate activities are in process. But regardless, I find the opinions and actions of FOMC members to be completely adolescent, counterproductive and nothing more than window dressing, akin to putting lipstick on a pig.

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