The Perils of Fed Gradualism

Stephen Roach pens an article on Project Syndicate outlining the Monster that the Fed has created - financial markets.  He does on to discuss what the Fed should do to address overheated financial markets:

Only by shortening the normalization timeline can the Fed hope to reduce the build-up of systemic risks. The sooner the Fed takes on the markets, the less likely the markets will be to take on the economy. Yes, a steeper normalization path would produce an outcry. But that would be far preferable to another devastating crisis.

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Financial Advice For my New Son

Morgan Housel at the Motley Fool writes a piece on financial advise for his son.  And what great advice it is.  From the article:

Change your mind when you need to. I've noticed a tendency for people to think they've mastered investing when they're young. They start investing at age 18, and think they have it all figured out by age 19. They never do. Confidence rises faster than ability, especially in young men. Learn the skill of changing your mind, discarding old beliefs and replacing them with new truths. It's hard, but necessary. Don't feel bad about it. The ability to change your mind when you're wrong is a sign of intelligence.

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The day the Fed was created

From the Library of Congress:

On December 23, 1913, President Woodrow Wilson signed the Owen-Glass Act, creating the Federal Reserve System, an independent agency of the U.S. Government. Before the Federal Reserve began its operations in November 1914, America's banks functioned in widely divergent ways. These varied banking practices resulted in four major financial crises in less than forty years.

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Oil Inventories Peaking?

Existing Home Sales Plunge

The NAR is blaming a new Dodd/Frank regulation as the cause.  This is entirely possible, so we will have to wait for the coming months to see if this is a minor issue or something larger:

Mises on Money

Mises was a true intellectual giant.  What would our society look like if the majority of people understood the teachings of Mises?

Leuthold Group has been calling a market top for some time

Leuthold outlines the topping process in the below timeline:

Insightful and candid interview about the US empire

Why Capitalists Are Repeatedly "Fooled" By Business Cycles

Frank Shostak, one of my favorite modern Austrian Economists, outlines why capitalists are fooled by the lowering of interest rates.

The business cycle last many years.  So even if business men feel that the economy is weak and the government is attempting to coax them to invest by lowering interest rates, eventually, they will have to invest or go out of business.  

Interest rates must rise significantly in the future to extinguish the mal-investment that exists throughout the world.  It will be painful, but necessary.  From the article:

A businessman has only two options — either to be in a particular business or not to be there at all. Once he has decided to be in a given business this means that the businessman is likely to cater for changes in the demand for goods and services in this particular business irrespective of the underlying causes behind changes in demand.

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India could be an economic powerhouse, but it's not meant to be

This is a wonderful article about the outrageous bureaucracy that stifles the Indian economy like a wet blanket.  From the FT article:

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/d0378a54-a046-11e5-beba-5e33e2b79e46.html#ixzz3uyLHBnYU

On my desk is the latest copy of the Indian magazine, Bureaucracy Today (“Fearless journalism, our habit, our history!”). It is not satirical. The cover story examines the merits of the budget-busting 23 per cent pay rise awarded to more than 10m serving and retired civil servants . Anil Kumar Jain’s astrology column in the magazine is notable for the way it recycles phrases through the 12 signs of the zodiac. They include “Planets indicate unbelievable financial gains during this month” and “You may be nominated for a plum post or for a foreign assignment”; or the disconcerting “The unusual behaviour of your spouse may be a cause of concern”.

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Intrinsic Versus Subjective Value

Many investors, some very talented investors, believe an asset has intrinsic value. But Austrian Economists believe assets have subjective value.  Meaning, we rank ordinally our preference for A over B.

Intrinsic value must have a fixed point to be measured against, but no such fixed point exists within human action.  Everything really is different this time.

So how is one to use this knowledge for investment purposes?

I will be starting an investment letter outlining the answers to this question.  Look for more to come.

"Value is a judgment economizing men make about the importance of the goods at their disposal for the maintenance of their lives and well-being. Hence value does not exist outside the consciousness of men."

Carl Menger. "1. The Nature and Origin of Value", Principles of Economics online edition, Chapter III., The Theory of Value, referenced 2009-05-14.

Planning for the new year: Ben Franklin style

And other amazing creations and facts about Ben.  From the NY Times Article:

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Much talk from the Fed on neutral interest rates

But Frank Shostak destroys the myth of a neutral interest rate:

Interest rates directly effect asset price levels:

Lower interest rates, higher asset prices; higher interest rates, lower asset prices.  See the report from Haver Analytics:

What I learned when I followed Benjamin Franklin’s schedule for a week

By J. Money

As many of you know, I’ve been following in the steps of Benjamin Franklin all week long in an effort to find a better, and more productive, schedule for myself.

I’ve heard time and again that the most successful people in life rise and reflect before the sun does, so I figured why not give it a shot myself and see if I magically get successful over night too?

Even though I hated myself the second I hit “publish” on that post, because who the hell wants to wake up at 5 a.m. every day?

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International Rig Count

The average Baker Hughes International Rig Count for 2015 matches that of 2009.  How low can the count go?

Post Apocalyptic Fed Hike Action - SPX Edition

SPX down post Fed rate hike:

But the VIX does not care, at least not yet.  Who's right?

Post Apocalyptic Fed Hike Action - VIX Edition

Jobless Claims Are Very Low - Boom is on

Rate Tightening Since 1983

Industrial Production Continues to Weaken

One final check on the probability of a Fed rate increase

How the US Federal Reserve intends to raise rates

Excellent article on how the Fed will increase rates.  From the article:

The US central bank has maintained the effective Fed funds rate as its primary interest rate target at the upper end of a zero to 0.25 per cent corridor. Called “interest on excess reserves”, or IOER, this lets the Fed pay interest on money held at the central bank and when policymakers vote to lift interest rates, this IOER rate will presumably be lifted to 0.5 per cent.

In theory, this should drag the effective Fed funds rate up to this level, as banks should not be willing to lend to other financial institutions at a rate lower than what the central bank pays. But only actual banks have access to the IOER, and there are many other lenders in the Fed funds market that in practice have dragged the effective rate well below where the IOER is set.


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Bear Market Alert: Always Good Market Insight From The Leuthold Group

The divergence between the Dow Transports and the broader market indexes is cause for concern, according to Doug Ramsey at The Leuthold Group:

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I would not want to be Janet Yellen

It seems everyone is screaming "No Increase!"  But there is a political element to why the Fed must increase.  They cannot allow a recession to occur early in a new Presidential term.  Ideally, the economy is in a recession as a new President enters office.  Then new economic plans will follow.  If they allow the boom to continue, they run the risk of a recession occurring early in a new Presidential term.  The pressure on the Fed to "do something" will be intense and they will have to act - being fully exposed as serving the interest of the President.  The Fed wants to avoid this scenario at all costs.

Here is Larry Summers again stating the the Fed should not increase rates.  I suspect he is angling for a new role in the next administration.  He continues to say the Fed should not raise rates.  After a recession hits, he can then say "I told you so. Now put me in charge of the Fed.":

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What Will China Do Next?

China has truly altered the global economic landscape with significant, and I mean significant, mal-investment and over-investment.  Now that the tide is turning and price inflation is out of the bottle, what will China do next?  Allowing the free market to chart the course would be the best option, but China's leadership will not let that happen.  So I only see more money printing and more mal-investment over the comming years, unless inflation gets out of control:

Should the Fed raise rates?

Not according to this poll:

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Thomas Sowell - Culture Matters

Wall Street Week Interviews Icahn

He's a lot more colorful than Buffett:

Current Tightening Cycle Compared to History

Stock Pattern Recognition

There is a belief on Wall Street that patterns exist, can be identified and profited off of.  This is a mistaken believe.  Patterns do not exist, not at least in the way that one could use for predictive purposes.

The market is a complex system that is adaptable and self regulating.  It is always different. The factors are different, the people are different and most obviously is that we are not living in the past.  For a pattern to have predictive value, the factors must be the same, as is the case with scientific experiments.  Human behavior cannot be predicted.  Yes, there are some cute tests that show our biases, the they only remind us of our short comings.  As a group, we are very unpredictable.

So do not believe in chart patterns.  Here is the infamous Megaphone pattern.  It sounds really good, but it is just not true.  At best, the predictive value of this or any pattern is around 50% or random.  From the The Street article:

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Government Share of Consumer Debt: WOW

No good will come from this:

JOLTS Report Continues to Expand

The JOLTS report has exceeded the 2007 high:

What does the JOLTS report include:

Definition
The JOLTS report is the Labor Department’s Job Openings and Labor Turnover Survey. The headline number is job openings.

The JOLTS report defines Job Openings as all positions that are open (not filled) on the last business day of the month. A job is "open" only if it meets all three of the following conditions:
* A specific position exists and there is work available for that position. The position can be full-time or part-time, and it can be permanent, short-term, or seasonal, and
* The job could start within 30 days, whether or not the establishment finds a suitable candidate during that time, and
* There is active recruiting for workers from outside the establishment location that has the opening.

Active recruiting means the establishment is taking steps to fill a position. It may include advertising in newspapers, on television, or on radio; posting Internet notices; posting "help wanted" signs; networking with colleagues or making "word of mouth" announcements; accepting applications; interviewing candidates; contacting employment agencies; or soliciting employees at job fairs, state or local employment offices, or similar sources.

Job Openings does not include:
* Positions open only to internal transfers, promotions or demotions, or recall from layoffs
* Openings for positions with start dates more than 30 days in the future
* Positions for which employees have been hired, but the employees have not yet reported for work
* Positions to be filled by employees of temporary help agencies, employee leasing companies, outside contractors, or consultants. A separate form is used to collect information from temporary help/employee leasing firms for these employees.

JOLTS defines hires as all additions to the payroll during the month. JOLTS defines separations as all employees separated from the payroll during the calendar month.  Why Investors Care

Is M1 Topping?

M1 growth has topped out in April.  With the possibility of the Fed rising interest rates, it will be interesting to see if M1 continues to expand.

Bastiat: Seen and Unseen

This is probably one of the most insightful quotes I try to remember and emulate in all aspects of my life:

“In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.

“There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.

“Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Whence it follows that the bad economist pursues a small present good that will be followed by a great evil to come, while the good economist pursues a great good to come, at the risk of a small present evil.”

– From an 1850 essay by Frédéric Bastiat, “That Which Is Seen and That Which Is Unseen”

Here They Go Again

Fed is starting to give mixed signals.  This has been par for the course for many years leading up to decision time.  Here is Fed 's Kocherlakota:

He added: “What’s going on in the labor market does not strike me as a strong argument for tightening.”

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Never Believe a Forecast

Ever wonder how certain folks on TV are able to make predictions with no doubt whatsoever?  Barry Ritholtz has a good article on just that and even better advice, "just ignore them".  From the article:

It’s that time of year again when the mystics peer deep into their tea leaves, entrails and crystal balls to divine what’s ahead.

Which means it’s also time for my annual reminder: These folks cannot tell the future. Ignore them.

Most forecasters are barely familiar with what happened in the past. Based on what they say and write, it is apparent they often do not understand what is occurring here and now. Why would anyone imagine that they have the slightest clue about the future?

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Shiller on market reaction to Fed rate increase

From the article:

It could be argued that the Fed will surprise people only if it doesn’t raise rates after Friday’s strong jobs report, or raises them less than expected or issues a statement that is weaker than expected. Something like that may have happened on Thursday when the European Central Bank’s stimulus measures evidently disappointed the markets.

But a major surprise from the Fed? That would be surprising.

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Can central banks print money in perpetuity?

Theoretically, yes central banks can print money and inflate forever.  What can stop central banks from endlessly inflating?  A number of theories have been developed.  However, hyperinflation is the only thing that will stop the central bank from inflating.

Here’s Rothbard on the continuation of fiat currencies:

I am not saying that fiat money, once established on the ruins of gold, cannot then continue indefinitely on its own. Unfortunately … if fiat money could not continue indefinitely, I would not have to come here to plead for its abolition.[mises.com]

Here is Mises' on when it ends:

If once public opinion is convinced that the increase in the quantity of money will continue and never come to an end, and that consequently the prices of all commodities and services will not cease to rise, everybody becomes eager to buy as much as possible and to restrict his cash holding to a minimum size. For under these circumstances the regular costs incurred by holding cash are increased by the losses caused by the progressive fall in purchasing power. The advantages of holding cash must be paid for by sacrifices which are deemed unreasonably burdensome. This phenomenon was, in the great European inflations of the 'twenties, called flight into real goods (Flucht in die Sachwerte) or crack-up boom (Katastrophenhausse). [mises.com]

What is the Money Supply?

Good video series from the Philadelphia Fed explaining the differences between the various money supply measurements.  M1 has the most direct impact on inflation and asset prices:

Key Insider: "Almost impossible for Fed not to hike"

El-Erian is a trend follower.  He has a way of summarizing what is happening, but is too smart to make any predictions.  So when he says it's almost impossible for the Fed not to hike, it is just about a sure thing that the Fed will raise.  If not, it will be a big surprise to markets.  From El-Erian's article on Bloomberg:

The jobs report for November released Friday doesn't just make it a near-certainty that the Federal Reserve will hike interest rates later this month. The data also further confirm the divergence in the policies of the Fed and the European Central Bank. And they highlight the cyclical and structural complexities facing the U.S. economy, which will require the Fed to pursue the loosest tightening cycle in its modern history.

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Stock Market Reactions to Past Fed Lift Offs

The market is very complex and you can only use history as a guide for general expectations about the future, not a prediction about the future.  So here is a great look at past market reactions from previous "lift offs."  From The Almanac Trader:

We currently appear to be tracking the historical pattern of positive market action leading up to the first rate increase, which would indicate a mild selloff after. However, as we have been thinking recently, this being the most debated and anticipated Fed move of all time, the removal of uncertainty may send stocks higher into yearend this time around.

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80% Chance of Rate Hike in December

Does Zuckerberg Think We're Suckers?

The NY Times takes down Zuckerberg's phony donation claim.  From the article:

Mark Zuckerberg did not donate $45 billion to charity. You may have heard that, but that was wrong.

Here’s what happened instead: Mr. Zuckerberg created an investment vehicle.

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Hillary's Interest Rate Prediction (Just Silly)

From the Reuters article:

"The Fed has been signaling this for a very long time if they do make this decision by the end of the year ... I think the markets in the U.S. and the world will have already processed that and they have laid out what criteria they think should be applied," she told reporters after a campaign event.

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Wages in China, Mexico and Brazil

The Big Short Trailer

ISIS - Que Bono

I have a few questions regarding ISIS, AL-Qaeda, etc.:

1. Why is it that the general public knows more about these groups than basic economics or other local issues that directly affect them?
2. Where do these groups get their money?
3. Who provides their training?
4. How do they get intell and who provides it?
5. How do they maintain supply chains?
6. Why do they have known operational basis?
7. Who benefits from their existence?

 Why are these questions not being asked?

Bernanke Pats China On The Head

In a somewhat bizarre post on his blog, Bernanke gives China a "gold star" for gaining access to the IMF's SDR.  From the post:

If your elementary school was like mine, when you did a good job on your homework you got it back with a gold star pasted on top. The gold star was not valuable itself—you couldn’t deposit it in the bank—but it recognized your good efforts and, maybe, motivated you to work hard on the next assignment. 

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ISM Dips

ISM Index Contracts

The ISM Index is below 50%, which suggests that the economy is slowing significantly on the manufacturing side.  Exports are dragging the economy down, which is mainly due to China's contracting money supply.  However, China is starting to ramp up money supply growth and should this continue, we except the economy to be in a very different place this time next year:

Mixed Signals From The Fed

Many complaints about the Fed's inconsistent message has surfaced of late.  It's possible, that the Fed is facing some discord from within.  It's also possible, that the Fed is trying to keep everyone guessing.  In a recent posted titled, "Keep 'Em Guessing," I argued that the Fed must keep every guessing once the boom is on.  Otherwise, the situation (i.e. prices) can easily go off the rails.  This will happen anyway, but they are trying their best to "manage" what is a price.  Price management or price controls have always failed and will always lead to significant economic disruption.

The Fed Needs to Get Its Story Straight

The U.S. central bank is sending mixed messages on when an interest rate hike will finally happen. The bankers better get their communications strategy in order. Now.

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Credit Growth Slowing

Credit growth is slowing according to the NACM Credit Manager's Index.  Although there is a lag, M1 has slowed for some time and that slower growth will show in indexes like the NACM:

Pedro the Impaler

Anatomy of a Meltdown
Ben Bernanke's Washington tell-all says too little, too late
Pedro Nicolaci Da Costa

Former Federal Reserve chairman Ben Bernanke’s new book feels more like the first of many acts than an authoritative memoir. And the main body of the narrative remains, so far as financial history is concerned, very much a work in progress.

Still, notwithstanding its provisional character, there’s no denying that The Courage to Act is a useful document. Bernanke was arguably the most powerful economic official in the world during the worst global financial crisis since the Great Depression. His direct account of that event, staid though it can be, is invaluable—both for the official record and for understanding how his thinking shifted during an eventful eight-year tenure atop the Fed.

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Itching For Another War

From Eric Margolis:

ANOTHER BIG STEP TO A MAJOR WAR

Turn to page 214 in the book “War-making for Dummies.” You will find: “plan air operations right on your neighbor’s border, zig in and zag out, make rude gestures at enemy pilots, and shoot them down if you can.”

On Tuesday this week, the inevitable air clash occurred on the Syrian-Turkish border west of Aleppo. From what we know so far, two Russian SU-24 bombers that had been pounding anti-Damascus forces on the border briefly intruded on Turkish airspace for all of 17 seconds.

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Why do the Central Banks want inflation?

Without inflation, the existing debt would crush the system.  The existing debt could be paid off and major defaults would follow.  This would reset the deck and would be a wonderful development over the long term, but very painful over the short term.  This option is always available, but who is going to be the one to bring down the current economic system?  Certainly, no one voluntarily.

Keep 'Em Guessing

For inflation to work, a central bank must have key market participants believe they will inflate, while having the masses believe the prices will remain about the same as recent past.  The moment the majority of the public believes that prices will move higher over the longer term, they will bid general prices significantly higher.  This will cause the central bank to tighten monetary policy and push the economy into a recession.

To prevent price spikes, the central bank must keep most participants guessing.  To see through all the central bank double talk, the following rule should be used when analyzing future central bank decisions: The central bank must ensure money supply is increasing.  The only exception to this rule: Except when money supply contracts. 

The exception to the rule may sound odd at first, but a contracting money supply usually follows a boom. The banks themselves are likely to be in financial trouble at this point in the cycle, which is why the money supply is contracting.  The central bank could step in to increase the money supply, but it is very difficult for a central bank to increase the money supply (i.e. Q.E.) when the boom is in progress.  Not only would a Q.E. program be politically difficult, but market participants would bid prices much higher.  So a central bank must wait for the bust to surface to provide cover for future money supply growth.  Then the first rule takes effect and the business cycle unfolds.   

Can markets be manipulated over the long term?

The short answer is yes.  Although most market participants believe the markets are susceptible to short term manipulation, many feel market manipulation over the long term is not possible.  Although there are times when the market may get away from the authorities like the Fed, most of the time, the Fed can strongly influence or outright control markets.

As an analogy, most all government action is compulsory with the threat of punishment for non compliance.  The government need only to take a small group of people and make an example out of them for the rest to see.  For example, riots get a lot of play in the media.  But once the government has had enough, they make an example out of specific groups (i.e. beatings and arrests) for all to see.  This is typically enough to send most rioters packing and keep those watching at home.

The same analogy holds true for the Fed and why the old adage of "Don't fight the Fed" has endured for many years.  The Fed will overwhelm any group of market participants because of their printing press.  So most, but not all, jump on the side of the Fed. 

To conclude, the Fed can manipulate markets over the long term.  

Murray Rothbard on Milton Friedman

Milton Friedman was a great economist, but fell short of the high standards that Austrian Economics imposes.  Studying the differences among Mises, Rothbard and Friedman (and yes, even Bernanke) provides an excellent overview between the two worlds that we live in: the one that should be (Austrian view) and the one that is (Keynesian view) - at least for now.

At the end of the day, the Austrians' will have the final say.  Rothbard's critique of Friedman is outlined in this five part video series:

Morning with Murray

Perhaps the most important book on economics behind Mises' Human Action is Murray Rothbard's the Mystery of Banking.  Murray breaks down how central banks and commercial banks produce inflation.  A wonderful read, deeply insightful and full of knowledge that only a select few - unfortunately - in our society will be lucky enough to access.

Murray Rothbard on Economic Recessions

US Money Supply Continues to Slow

M1 continues to decline from its peak.  This is the likely cause of the economic slowdown we are currently experiencing.  Will this lead to a recession?  It's possible, but the signs are not there at this time.  

Austrian economic theory suggests that a slowdown in money growth is enough to push the economy into a recession.  But there have been times when the money supply has slowed, but the economy did not enter a recession.  

The following chart is M1 Money Supply on a year of year basis:

Defining Buffett's Economic Moat

Warren Buffett focuses on companies that have an economic moat.  Intuitively, we know what this means, but defining what an economic moat is not so simple.  Fortunately, Bruce Greenwald has done that for us.

In his article, "All Strategy is Local," Greenwald outlines the three types of competitive advantages:

1. Customer captivity
2. Proprietary technology
3. Economies of scale

I highly encourage anyone to read "All Strategy is Local" for both investing and better understanding your own business and industry.

Has oil bottomed?

Oil has likely found a bottom. Although possible for prices to move lower, the odds favor higher prices over the next year.  The following demonstrates the dramatic decline in rig counts:

The rig count will likely further decline.  A number of reports are starting to surface concerning the bankruptcy of many small oil companies.  Should this happen, it may be a good time to buy high quality energy companies.  

One company that I am following is Atwood Oceanics (ATW).  ATW is a high quality drilling and exploration company.  I have initiated a position in ATW.  

Why is China in recession?

Because money supply significantly contracted.  The following chart is a year-over-year change in M1 through June 1, 2015:

However, recent data suggests that M1 is starting to expand at a rapid pace - 12% on a year-over-year basis.

What is inflation and where does it come from?

What are traders thinking about a December hike?

From the CME's Fed Watch Tool:

FedWatch Tool

Based on CME Group 30-Day Fed Fund futures prices, which have long been used to express the market’s views on the likelihood of changes in U.S. monetary policy, the CME Group FedWatch tool allows market participants to view the probability of an upcoming Fed Rate hike.

This is the most bullish traders have been in some time.  So despite the consistent Fed statements and inconsistent Open Mouth Policy, the market has given a high probability (77.5%) to an increase.  However, there remains a 22.5% chance that the Fed may not raise rates.  

The reality is the increase is very unlikely to make a difference in economic activity.  So why all the fuss?  The Fed needs to keep interest rates low for a long time to reduce debt.  In order to reduce debt, the Fed needs inflation.  It also needs to keep market participants guessing about the future.  If not and most market participates concluded that the Fed was going to keep rates low for a very long time, then expectations can get away from the Fed.  This would likely unleash a significant boom and the Fed would have to put on the breaks.  This, from a debt perspective, would be disastrous.  

To conclude, a lot of time and drama has been spent on what would be a 25BP increase.  The Fed has certainly achieved its goal maintaining very low interest rates and tempered expectations about the future, whether interest rates increase or not.  

Will the Fed raise interest rates?

Here is a summary of the Fed's statements since 2009.  If one were to focus on these statements and nothing else, a reasonable conclusion would be that the Fed is not going to increase rates. Alternatively, if the Fed does increase rates, then I suspect a sizable number of market participants will be surprised.  This is why the Fed has used their "open mouth policy" to guide market participants.  We'll look at the market probabilities of a Fed hike next:

Release Date: August 12, 2009

“The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.”

Release Date: August 10, 2010

“The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.”

Release Date August 9, 2011

“The Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent. The Committee currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.”

Release Date: August 1, 2012

“The Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”

Release Date: July 31, 2013

“The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored.”

Release Date: July 30, 2014

“In determining how long to maintain the current 0 to 1/4 percent target range for the federal funds rate, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation.”

Release Date: July 29, 2015

“The Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation."

Release Date: September 28, 2015

“The Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining whether it will be appropriate to raise the target range at its next meeting, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation.”

Release Date: October 28, 2015

“The Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining whether it will be appropriate to raise the target range at its next meeting, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation.”