There’s no taper coming now, says FOMC member and noted dove Ted Evans:
“I expect our overall stance of monetary policy to remain highly accommodative for some time to come. It is not yet time to remove accommodation. The data are still not definitive enough to say that now is time to adjust. Only the data can tell us how much progress we’ve made, and they aren’t saying much right now: The data available in September were inconclusive, and since then, incoming information has been silenced with the federal government shutdown…There are simply no signs of cost pressures building…it could take several years for us to return to our 2 percent inflation objective.”
Perhaps even more striking, Fed President and vocal hawk (but not voting member) Richard Fisher threw in the towel:
Dallas Fed President Richard Fisher said in an interview with CNBC that he can’t see himself making the argument to scale back the program at the Oct. 29-30 meeting if the markets are still rattled or there still isn’t a resolution to the fiscal fight.
“We don’t want to upset the boat here. I don’t want to upset the boat” on the “horribly rough seas” being produced by Congress and the White House,” said Mr. Fisher.
Not only has the fiscal showdown created a headwind for economic growth, it has also complicated the Fed’s ability to see how the economy is doing, Mr. Fisher said…“Here we are full throttle at the Fed, they’ve got the foot jammed on the brake and they’re smashing the instrument panel at the same time, and we’re in mid-flight,” he said.
The results were instant. Treasuries rallied strongly with yields falling almost 2% and very close to breaking to a new low, the US dollar got hammered almost 1%:
Gold took off:
And so did the Australian dollar:
Party on, dude!
