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Takeaway: The probability is rising that Janet makes her 2nd policy mistake (raising into a slow-down) in 8 months.

A Few Brief Thoughts On Janet Yellen's Speech Today - rate hike cartoon 12.04.2015

I just spent the last 30 minutes in the car listening to maybe the most complacent recap of Fed forecasting risk yet. Today Janet sounded as hawkish as she's been (mainly because her assessment of the economy is as off as it's been). Here's what she said:

“It’s appropriate, and I’ve said this in the past I think, for the Fed to gradually and cautiously increase our overnight interest rate over time, and probably in the coming months such a move would be appropriate."

In other words, the probability is rising that Janet makes her 2nd policy mistake (raising into a slow-down) in 8 months. 

You go rate hike pro – you go.

A Few Brief Thoughts On Janet Yellen's Speech Today - Rate hike cartoon 11.30.2015

The biggest risk to both markets and the country remains the Fed's forecast. With a "0" in front of GDP and S&P earnings growth down -8.5% y/y, should the Federal Reserve raise rates in June? 

I'll let you be the judge of that but consider this: If the US Government used the Fed's prefered measure of inflation, US GDP would have been NEGATIVE in Q1.

If you didn't listen to Hedgeye and sold on the last policy (hike) mistake in December, you're being advised to listen now.