by John Galt
September 21, 2016 19:20 ET
The Federal Reserve Open Market Committee (FOMC) issued their statement on interest rates and the always wrong economic outlook at 2 p.m. today (From the Federal Reserve webpage):
Release Date: September 21, 2016
For release at 2:00 p.m. EDT
Information received since the Federal Open Market Committee met in July indicates that the labor market has continued to strengthen and growth of economic activity has picked up from the modest pace seen in the first half of this year. Although the unemployment rate is little changed in recent months, job gains have been solid, on average. Household spending has been growing strongly but business fixed investment has remained soft. Inflation has continued to run below the Committee’s 2 percent longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation remain low; most survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will strengthen somewhat further. Inflation is expected to remain low in the near term, in part because of earlier declines in energy prices, but to rise to 2 percent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further. Near-term risks to the economic outlook appear roughly balanced. The Committee continues to closely monitor inflation indicators and global economic and financial developments.
Against this backdrop, the Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent. The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.
In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. In light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and expected progress toward its inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.
The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction, and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This policy, by keeping the Committee’s holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.
Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; James Bullard; Stanley Fischer; Jerome H. Powell; and Daniel K. Tarullo. Voting against the action were: Esther L. George, Loretta J. Mester, and Eric Rosengren, each of whom preferred at this meeting to raise the target range for the federal funds rate to 1/2 to 3/4 percent.
But is this what the allegedly apolitical Federal Reserve actually said? In the post release press conference several pointed questions were asked of Chairwoman Yellen relating to the Presidential race and policy which she stated clearly had no influence on Fed decision making.
The truth is that the Federal Reserve said what it’s owners, the member banks, especially the founding members and largest shareholders like JP Morgan Chase and Goldman Sachs, do not want a firebrand or non-insider to win the Presidential election. As much as a despise Donald Trump, the feelings towards his campaign have already been publicly exposed by their donation restrictions and fear mongering by their representatives on the pro-Hillary financial news/propaganda networks of CNBC and Bloomberg Radio/TV.
In fact it is so blatant, even the left wing website Politico acknowledged the accommodation by the Federal Reserve Chairwoman in this story today:
Scratch one big economic worry off the list for Hillary Clinton.
Federal Reserve policymakers on Wednesday kept their key interest rate steady, avoiding a potential stock market disruption and putting the central bank on the sidelines until after Election Day.
Fed Chair Janet Yellen also strongly rejected claims lobbed at her by GOP presidential nominee Donald Trump that she is keeping rates artificially low to boost stock prices and aid Democrats.
“I can say emphatically that partisan politics plays no role in our decisions about the appropriate stance of monetary policy,” Yellen said at a press conference after the Fed announced its decision. “We do not discuss politics at our meetings and we do not take politics into account in our decisions.”
Nonetheless, the Fed’s actions can have significant political consequences.
The Federal Open Market Committee’s decision means voters are not likely to see big stock price declines or a slowing economy before the Nov. 8 election. Clinton is counting on slowly improving views of the economy to hold off a late surge from Trump, who has made dissatisfaction with the sluggish pace of growth a centerpiece of his populist campaign. Stocks rose following the Fed’s announcement.
“The Clinton campaign should absolutely breathe a sigh of relief because the market was just not positioned at all for a rate increase; there would have been total chaos,” said Brett Ewing, chief market strategist at First Franklin Financial Services. “Less drama is clearly good for the incumbent party.”
In other words, what is good for the banksters, bad for the elderly savers, and beneficial for Hillary Clinton is acceptable and the will of the people be damned. Anything which makes the pro-bankster or Obama economy con game continuing through November must be maintained no matter how absurd the illusion really is.
Do not be shocked my friends if the Fed asks Diebold to ensure the election results in their favor as this election is for issues far larger than Donald Trump or Obama’s legacy; it is about the forced integration of the American system and its citizenry into a globalist system where our economy is merged with a world system of currency and taxation to eradicate the greatest experiment in freedom in world history.