<a href='And as a bonus, here is SocGen's current set of assumptions for the chronology of Fed exitsteps:
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by GetZeeGold on Mon, 06/06/2011 - 09:59 #1343116
Cool...scorecard!
Good to see everyone in agreement.
This should be a snap.
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by ugly_avatar_Muir on Mon, 06/06/2011 - 10:03 #1343127
BTFDs!
and specially silver
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by Concentrated po... on Mon, 06/06/2011 - 10:03 #1343130
Bread and Circuses. Next up on E-Bay - Nero's Fiddle.
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Bernanke – QE2 will be completed, but very little chance of QE3 as the trade-offs are unfavorable. Inflation expectations are stillin comfortzone,but continueto watch very closely.
Pianalto – Labor market remains a long way from healthy. Looking at just above 3% GDP growth over next few years. Will takeabout5 to 6 yearsforunemployment rate to reach NAIRU (5.5 to 6%).
Kocherlakota – Fed should raise the Fed funds rate by 50bps in 2011. Rate hikes hinge on his forecast for core inflation averaging 1.5% for rest of year. Rate hikes should be first move in exit strategy. Extended language means 2 to 4 meetings.
Lockhart – Extended period change hinges on Unemployment. Job progress slow and inflation transitory. QE3 probably unnecessary. Inflation will move to about 2% in two years.
Lacker – Inflation expectations at the upper end of the Fed’s comfort zone. Recent surge in commodity prices likely temporary. After QE2 focus shifts to timing and speed of stimulus withdrawal.
Bullard – Fed may put policy on hold to ensure economic recovery is gaining ground. Does not give judgment whether he agrees with this. US can weather recent oil price shock.
Dudley – Time to act is now. Current levels of inflation and unemployment and timeframe to return to mandate unacceptable. Showed support for price level targeting.
Evans – BelievesthatFed needsto buy ata largescale several times. Thiswould support a priceleveltarget to make up for the shortfall in Inflation. Strong support for price leveltargeting.
1. End of QE2 The April FOMC statement confirmed that QE2 will end on schedule,afterreaching the$600bn target. This will mark the official end of the Fed’s easing cycle. When? June 2011
2. Halting MBS reinvestments Bernanke noted in its April FOMC press conference that halting MBS reinvestments will most likelyoccur early in the exit process. Fed will probably wait a few months following the end of QE2 to assess the impact before taking this next step. When? September 2011
3. Liquidity draining operations We believethishasto be done ahead of rate hikes, or else the effective fed funds rate will tradeawayfrom the target. The Fed could use a combination of reverserepos, term depositsand possibly restore the Supplemental Financing Program (subject to Congress increasing debt ceiling). When? November 2011
4. End of “extended” language The Fed has previously suggested thattheextended language means about 6-9 months. Given the timing of our rate call, the phrase should be dropped around the turn of the year. When? December 2011
5. Rate hikes Our call is for mid-2012, with a biastoward the third quarter. When? Q3’2012
6. Asset sales We believethatoutright asset sales will begin around the time of the first rate hike. Fed has indicated a goal of returning the size and composition of its securities portfolio to pre-crisis trend over 5 years. We believe they will start by selling about$10bn per month. When? Q3’2012'>And as a bonus, here is SocGen's current set of assumptions for the chronology of Fed exitsteps:
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by GetZeeGold on Mon, 06/06/2011 - 09:59 #1343116
Cool...scorecard!
Good to see everyone in agreement.
This should be a snap.
Login or register to post comments
by ugly_avatar_Muir on Mon, 06/06/2011 - 10:03 #1343127
BTFDs!
and specially silver
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by Concentrated po... on Mon, 06/06/2011 - 10:03 #1343130
Bread and Circuses. Next up on E-Bay - Nero's Fiddle.
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Supported by Ubercart, an open source e-commerce suite.
Bernanke – QE2 will be completed, but very little chance of QE3 as the trade-offs are unfavorable. Inflation expectations are stillin comfortzone,but continueto watch very closely.
Pianalto – Labor market remains a long way from healthy. Looking at just above 3% GDP growth over next few years. Will takeabout5 to 6 yearsforunemployment rate to reach NAIRU (5.5 to 6%).
Kocherlakota – Fed should raise the Fed funds rate by 50bps in 2011. Rate hikes hinge on his forecast for core inflation averaging 1.5% for rest of year. Rate hikes should be first move in exit strategy. Extended language means 2 to 4 meetings.
Lockhart – Extended period change hinges on Unemployment. Job progress slow and inflation transitory. QE3 probably unnecessary. Inflation will move to about 2% in two years.
Lacker – Inflation expectations at the upper end of the Fed’s comfort zone. Recent surge in commodity prices likely temporary. After QE2 focus shifts to timing and speed of stimulus withdrawal.
Bullard – Fed may put policy on hold to ensure economic recovery is gaining ground. Does not give judgment whether he agrees with this. US can weather recent oil price shock.
Dudley – Time to act is now. Current levels of inflation and unemployment and timeframe to return to mandate unacceptable. Showed support for price level targeting.
Evans – BelievesthatFed needsto buy ata largescale several times. Thiswould support a priceleveltarget to make up for the shortfall in Inflation. Strong support for price leveltargeting.
1. End of QE2 The April FOMC statement confirmed that QE2 will end on schedule,afterreaching the$600bn target. This will mark the official end of the Fed’s easing cycle. When? June 2011
2. Halting MBS reinvestments Bernanke noted in its April FOMC press conference that halting MBS reinvestments will most likelyoccur early in the exit process. Fed will probably wait a few months following the end of QE2 to assess the impact before taking this next step. When? September 2011
3. Liquidity draining operations We believethishasto be done ahead of rate hikes, or else the effective fed funds rate will tradeawayfrom the target. The Fed could use a combination of reverserepos, term depositsand possibly restore the Supplemental Financing Program (subject to Congress increasing debt ceiling). When? November 2011
4. End of “extended” language The Fed has previously suggested thattheextended language means about 6-9 months. Given the timing of our rate call, the phrase should be dropped around the turn of the year. When? December 2011
5. Rate hikes Our call is for mid-2012, with a biastoward the third quarter. When? Q3’2012
6. Asset sales We believethatoutright asset sales will begin around the time of the first rate hike. Fed has indicated a goal of returning the size and composition of its securities portfolio to pre-crisis trend over 5 years. We believe they will start by selling about$10bn per month. When? Q3’2012</a>
