Fed Pledges "Patience", Dot Plot Suggests No Hikes in 2019


Today the Fed pledged patience and a majority of officials signaled they might not raise the rate at all this year.

Statement Tracker

The above image from the Wall Street Journal Statement Tracker.

Bond yields collapse. I will have some charts in just a bit. The statement revisions are substantial, but not massive. The Dot Plot change was massive.

Dot Plot December 2018

That's quite a change. Note in particular the Fantasyland projections for 2020 and 2021.

Powell: 'A Great Time for Us to Be Patient'

Fed Chairman Jerome Powell has already fielded a series of questions trying to pin him down on whether, and in which direction, the Fed is inclined to adjust policy. But he's clearly not planning to provide much guidance on that question today.

"Data we’re seeing are not currently sending a signal," of needing to move in either direction. It's "a great time for us to be patient," Mr. Powell said.

The above from Federal Reserve Interest-Rate Decision—Live Analysis.

Inversions are now massive. Some charts coming up shortly.

Meanwhile, here is the pun of the day question.

Mike "Mish" Shedlock

No. 1-8


Balance sheet reduction on hold I believe


Seven years of ZIRP, followed by three years of tightening and we only made it to 2.25%. Pretty pathetic.

In late 2008 they were able to cut from 5.25 to 1%, then two months later all the way to zero. Looks like the Fed can only take a mini-bazooka into battle this time.


reaffirms what we all been say'in. if the economy can't handle minuscule interest rate hikes, we really never had a recovery. yet for 10 years no structural changes- let the fed do the heavy lifting. this is the new norm.


Only until September. So that means that a $3.5 Trillion balance sheet is now "as good as it gets". FUBAR.


The Fed is FUBAR.