Parsing the Fed

The original Fed statement is here;

The WSJ Parses this statement with last month’s:

THE FED’S STATEMENTS reflect how the members of the central bank’s
Federal Open Market Committee perceive the economy. The slightest changes are
scrutinized for clues about where interest rates may be headed. The May 10
statement announced that the Fed was raising its key short-term interest rate by
one-quarter point to 5%, its 16th increase in a row and second under Bernanke —
which came as no surprise. More importantly, the statement opened the door for a
halt to rising rates for the first time in two years, while not ruling out more
increases. Below are the differences between the May statement and the March one.


click for larger graphic

Infofedparse0605

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What's been said:

Discussions found on the web:
  1. John commented on May 10

    I think we oughta ask CNBC’s genius Baritromo on where the Federal Funds Rate is headed. I bet she’s got the inside scoop on what those changes to the Fed’s statement means.

  2. Mark commented on May 10

    So “may YET be needed” is weaker, more conditional language than “may be needed”? Are they effing kidding me? That is PURE projection. All that language pertains is to futurity, not conditionality, of the action.

  3. Uncle Jack commented on May 10

    That “yet” was a slip, just a little different use of the language compared to Greenjeans and that’s all. You’ll see. Maria will be coming out with a clarification for us next week, approximately 3:05p.m. two days after she has dinner with Ben.

    Two more, that’s my guess. 5.5%

  4. Lowell commented on May 10

    Hey Barry,

    You’ve been pretty rough on Bernanke but I gotta say – he’s got a suicide mission here. What the heck can he be doing differently?

    The best that he can hope for is an orderly end to the housing market and if he hikes to hard he could disrupt that. If he hikes too much, the dollar may stay strong and we need a weakened dollar to really settle our trade imbalances.

    Isn’t the smart thing for him to do is raise gently at 1/4 point rates, hope for a “soft landing” in real estate & then start cutting again when the recession kicks in?

    I dunno. I can’t see what it is different that “Gentle Ben” can be doing.

    What would you do differently if you were Fed Chief?

    -LM

  5. todd commented on May 11

    anyone else rolling their eyes as a short squeeze on GM shares leads the Dow to an all time high?

  6. Ned commented on May 11

    I may be imagining it but I feel like I am seeing short squeezes everywhere. With all the hedge fund money out there maybe it is not my imagination but on the charts it looks like someone sure tried to get short too soon on a lot of names. IMHO.

  7. grim commented on May 11

    I bet the Board of Governors are sitting around a laptop right now laughing over all these detailed analysis of the word “yet”.

    grim

  8. john commented on May 11

    Everyone’s looking for something to short and too many of them are using “just too high” as their criteria. Consequently if it goes a bit higher they are covering in fear.

    That said – who in their right mind would short GM? 84% of the shares are held by institutions. Another 10% by insiders and 5 percenters. These folks are making a great living by lending their shares to be shorted. Then all that is needed is a small churn in the remaining 6% and bang the squeeze is on.

  9. tjofpa commented on May 11

    Yes, definetly rolling my eyes as the same old high price stocks are being used(BA,UTX,CAT) along with GM to achieve a new headline alltime “HIGH”. Won’t be no
    flation adjusting there! CAT was quiet yesterday; probably come off the bench today.

    I just wonder what planet I’m on when I hear talk of a pause with the $ TANKING in terms of commodities. This is pure BS coming from Wall Street. Even by raising 1/4 pt every meeting for 16 in a row they’re way behind the curve. All we need now is Jim Baker’s infamous declaration that the Admin no longer wants a strong dollar. Wait a second… what did he say?

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