The all-powerful FOMC meets tomorrow and will provide us with mostly conjecture as to their continued waffle of a monetary policy. It was just a few months ago the FOMC was calling for 4 rate hikes in 2019, my how things have changed, we will be lucky to get one. The combination of balance sheet reduction and lack of global real sustainable growth has led the FOMC to produce nothing short of one’s tail between the legs.
This is just going to be a quick technical update. We haven’t truly seen anything game changing take place over the last two weeks.
We continue to hear chatter of a China/US trade resolution, but we doubt this pig will be dealt with any time soon. This chart to the left is certainly cannon fodder for #POTUS to continue to pound the pavement for a much better US trade deal.
The Commerce Department released their latest numbers last Thursday which showed that Imports exceeded Exports by a new record of $914 billion in 2018. (WSJ)
This week we received the FED minutes and here is what Jan Hatzius, Goldman’s chief economist had to say, “the minutes of the January FOMC meeting continued to emphasize patience in the policy outlook due to uncertainty around financial conditions, slower foreign growth, and softer inflation." In simple terms its #Qe4evR!
What is becoming obvious now is the fact that the global central banks can no longer hide the fact that without their QE and balance sheet expansion, asset prices would fall and economies would reverse. The last month or so has seen a huge reversal in the markets expectations for future rate hikes and one by which certainly shouldn’t have surprised any of our readers. We have used and will continue to use the #QE4EVR theme as basically we are and will all continue to be bound to the low interest rate to negative rate environment. We aren’t stupid…