Yesterday on Fox Business’ Opening Bell, Hedgeye CEO Keith McCullough asked: “What if Janet Yellen untapers? If she untapers, gold is going to rip. If growth slows and surprises on the down side this year, she is going to do what she has been fundamentally trained to do, which is get dovish rhetorically, untaper and gold’s going to rip.”
That said, we asked you in today’s poll: What are the odds that Janet Yellen’s Fed UNTAPERS this year?
At the time of this post, 54.93% of voters overall leaned toward YES. The conviction of those who voted YES was 8.25% higher on average.
“Can't get and won't get the GDP growth needed this year, CPI is still deemed relatively low, and Fed believes higher inflation is controllable,” said one YES voter. “Therefore, attaining Fed deemed sufficient nominal GDP will require importing inflation (further devaluation of the dollar - #Untaper). Two previous 100% tapers results were completely unsatisfactory.”
Another person who voted YES explained, “I happen to believe there is a significant risk of a greater than 15% decline in equity indexes over the course of the year. If that comes to pass, the Fed will do the same thing they've been doing for the last five years when we've experienced protracted weakness in equities. Sure the Fed may be all in favor of tapering with markets near all time highs but that tune will change in a heartbeat if markets turn significantly weaker.”
However, a greater number of NO voters expressed the reason for their choice:
- “Bond buying process has too much visibility and impacts markets day to day in ways the Fed. IMHO wants to get rid of. They will develop a different method to ease with less visibility to replace buying bonds in the open market. Present process is probably actually hurting the economy rather than helping it.”
- “Turning a large boat around (that is the fed) is very difficult. This year is too soon the Fed won't react that fast. While the Fed may get more dovish that does not mean they will untaper. While things have been slowing in terms of growth we aren't in a 2008-like risk event which everyone is freaking out about. Sure if you're long TWTR, AMZN and other growth names you're freaking out but who is shocked if a stock with a 1,000+ PE cuts in half?”
- “I think the Fed knows: 1. the effect of QE on the real economy has been vacuous (even Yellen's own Fed in SF has said as much), and 2. the corruption of asset prices has become dangerous. Once they've started tapering its easier to keep going than to stop which would send out a panic signal and have limited effect on bolstering markets in any event.”
- “What's a couple extra bucks at the pump or supermarket when you stand to make 250K a speech after leaving the Fed? #beardLady”
- “The markets signaled their desire for the Taper long before Yellen came to the helm. The Fed doesnt want to run a hedge fund, and the Fed holding steady on the Taper is a major calming factor for global markets. I left 20% uncertainty: 10% because the Fed needs a margin of uncertainty, 10% for a geopolitical event like simultaneous Russia-Ukraine-Europe, and China-Japan-Vietnam wars.”