Fed’s dual-face mandate

The Federal Reserve concludes its two-day meeting today and there will be no rate rise announced.

The anemic September jobs number of 142K and the downward revisions of the two prior months took care of that notion.

If you believe that the Fed knows exactly what they are doing, well you would be gravely mistaken.

The Fed is flying by the seat of its pants. Janet Yellen and Ben Bernanke before her have no economic theory or history lesson to go by.

The fact that the Fed is at zero rates for seven plus years is astounding. No first world economy has been here for this long ever.

Their problem is no one has published the new economic theories coming out of the Great Recession, because no one knows how it ends.

Of course if you look into any economic or history textbook, it’s a global war that pulls the economy out of a protracted recession. Makes you want to read the Middle East headlines a little closer.

The fact that Yellen & Co. are still jawboning about a rate hike — in the face of the two major US trading partners admitting defeat one cutting rates in China and the other promising more easing in Europe — is laughable.

Global recession is here, the US just has not awaken to its reality. Retail sales down, consumer spending — despite cheaper gas — down.

And why is natural gas and crude oil down? Diminished demand as global factories are shuttered and less Americans driving to and from work.

I’ve said it numerous times on this blog, I believe the Fed is closer to easing than a rate hike and they would have done it already if the Fed didn’t fear deflation.

So while Fed watchers will parse the statement at 2:15 or so to see if a rate rise will occur at the December meeting, I will be looking to see if Yellen & Co. tip their hat to an early 2016 easing program.

Tomorrow I’ll take a look at the statement to show you where the Fed tipped its hat.

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