Another Round Of (Recessionary) Data? Hike Away Janet!

Takeaway: Today's data confirms our #GrowthSlowing Macro theme. But the Yellen Fed wants to hike interest rates anyway.

Another Round Of (Recessionary) Data? Hike Away Janet! - fed tightening noose

Fed Day has finally arrived.

We're pleased to announce that at 2:10 pm (directly following the FOMC decision) Hedgeye CEO Keith McCullough will host a live, unadulterated Q&A with viewers offering insight and analysis on what it all means for investors. 

Did we mention it's free? Click here to join him this afternoon.

Here's some food for thought while we wait with bated breath for our omnipotent central planners at Yellen & Co. to tell us precisely (or perhaps not so precisely) what the future path of interest rates will be.

Another Round Of (Recessionary) Data? Hike Away Janet! - mccullough production

Another Round Of (Recessionary) Data? Hike Away Janet! - indus 

Another Round Of (Recessionary) Data? Hike Away Janet! - treasury

Here's an excerpt from a note sent to subscribers earlier this morning written by Keith:  

"Rates both locally and globally, in 10yr Yields, are higher into the Fed hike event risk – 2.27% on the U.S. 10yr with an immediate-term risk range of 2.13-2.36%; Swiss 10yr +19bps month-over-month (off all-time lows) to -0.17%; Italian and German 10yr yields +11bps m/m."

 

Another Round Of (Recessionary) Data? Hike Away Janet! - yields

In related news, on "Fed Hike Into a Slowdown" day, the Bank of England's Mark Carney reversed his hawkish course saying the data has changed (so he will).

Another Round Of (Recessionary) Data? Hike Away Janet! - BoE

Carney was asked, by the Financial Times, about whether the prerequisite "conditions" had been fulfilled to raise rates:

"In an interview with the Financial Times, the BoE governor showed no sign of wanting to follow the Federal Reserve, which on Wednesday is widely expected to raise rates for the first time in nearly a decade. The Bank of England, rather, is focused on curbing excessive credit growth in a “low for long” interest rate environment, he said.

 

With little sign of inflation, Mr Carney said the priorities for the central bank were to increase the resilience of the banking system in the event of a downturn and reassess the safety of the buy-to-let lending market..." *Emphasis added*

 

Sound familiar? We've been warning subscribers about #LowerForLonger (rates) and #Deflation for a while now. So Carney is actually paying attention to the #GrowthSlowing data.

 

Meanwhile, everything the Fed didn't forecast in the past year (see deflation and slowing growth) is just "transitory." It all will pass, Yellen says. So why not hike interest rates?

 

Transitory? Hmm...

 

Remember today's Industrial Production numbers? 

 

Another Round Of (Recessionary) Data? Hike Away Janet! - industrial production info

Another Round Of (Recessionary) Data? Hike Away Janet! - industrial production 2

 

Or how about today's PMI Manufacturing Index Flash which slowed to 51.3, with new orders printing their slowest pace in more than two years? 

 

Not good... 

 

Hike away Janet!

 

Another Round Of (Recessionary) Data? Hike Away Janet! - Titanic 03.31.2014