fed raises rate from 0.x to 0.x - knocks zh offline

[cheka.]

zh went down at the time of the announcement

still down as i type this -- about 15 to 20 minutes....and counting


edit: still down...30+ minutes

[cheka.]

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[EE_]

Just shows the economy is healthy and strong. They should have raised the rate a full percentage point.
Strongest economy I've ever seen!

[EE_]

The Federal Reserve raised interest rates for the first time in almost a decade in a widely telegraphed move while signaling that the pace of subsequent increases will be “gradual” and in line with previous projections.

The Federal Open Market Committee unanimously voted to set the new target range for the federal funds rate at 0.25 percent to 0.5 percent, up from zero to 0.25 percent. Policy makers separately forecast an appropriate rate of 1.375 percent at the end of 2016, the same as September, implying four quarter-point increases in the target range next year, based on the median number from 17 officials.

“The committee judges that there has been considerable improvement in labor market conditions this year, and it is reasonably confident that inflation will rise, over the medium term, to its 2 percent objective,” the FOMC said in a statement Wednesday following a two-day meeting in Washington. The Fed said it raised rates “given the economic outlook, and recognizing the time it takes for policy actions to affect future economic outcomes.”

The increase draws to a close an unprecedented period of record-low rates that were part of extraordinary and controversial Fed policies designed to stimulate the U.S. economy in the wake of the most devastating financial crisis since the Great Depression. The FOMC lowered its benchmark rate to near zero in December 2008, three months after the collapse of investment bank Lehman Brothers Holdings Inc. and 10 months before unemployment in the U.S. peaked at 10 percent.

While the vote was unanimous, the rate forecasts show that two officials among the full group of voters and non-voters saw no rate increases as appropriate in 2015, without identifying them.

“The committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate,” the FOMC said. “The actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.”
Balance Sheet

The FOMC said it expects to maintain the size of its balance sheet “until normalization of the level of the federal funds rate is well under way.”

The quarter-point increase in the target fed funds rate, the overnight interbank lending rate that influences other borrowing costs in the economy, was forecast by 102 of 105 analysts surveyed by Bloomberg News.

The Fed gave a largely positive assessment of the U.S. economy, saying that expansion continued at a “moderate pace” and that a “range” of job-market indicators “confirms that underutilization of labor resources has diminished appreciably since early this year.”

The central bank also said that the risks to the outlook for economic activity and the labor market are now “balanced,” changing from a previous reference to being “nearly balanced.”

The Fed said monetary policy is still “accommodative after this increase, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.”

The central bank acknowledged the state of low inflation, saying that it plans to “carefully monitor actual and expected progress toward” its 2 percent target.

As part of the decision, the Fed increased the interest it pays on overnight reverse repos to 0.25 percent from 0.05 percent to put a floor at the lower end of the range. It also raised the interest it pays on excess reserves held at the Fed to 0.5 percent from 0.25 percent to mark the upper end of the range.

In a related move, the Fed’s Board of Governors unanimously voted to raise the discount rate, which covers direct loans to banks, by a quarter point to 1 percent.

Press Conference

Fed Chair Janet Yellen is scheduled to hold a press conference at 2:30 p.m. in Washington.

In addition to setting rock-bottom short-term interest rates during the crisis, the Fed engaged in three rounds of bond purchases aimed at suppressing long-term rates to stimulate borrowing and spending. Officials also provided unusually explicit guidance, assuring investors for years they intended to keep rates low well into the future.

Prior to 2008, the effective fed funds rate had never dropped below 0.63 percent, according to data compiled by the St. Louis Fed dating back to 1954.

In Dec. 3 remarks Yellen drew attention to how much the economy had mended since the darkest days of the recession, noting that unemployment had fallen by half to 5 percent, close to Fed estimates for the long-run normal level.

Still, the recovery has been disappointing for many. Household incomes remain lower than they were a decade ago when adjusted for inflation, and wages have climbed only sluggishly even as firms hired back workers. Hourly earnings have risen by about an average 2.2 percent annual pace over the past seven years, compared with 3.3 percent in the 20 years through 2008.

GDP Forecast
Gross domestic product expansion hasn’t topped 3 percent since the third quarter of 2010, on a year-on-year basis. It’s projected to grow 2.2 percent in the three months through December.

Representing another symptom of weakness, inflation hasn’t reached the Fed’s 2 percent target since April 2012. The core version of the central bank’s preferred gauge of price pressures, which strips out volatile energy and food prices, was just 1.3 percent in the 12 months through October.

Yellen said Dec. 3 that continued labor-market improvement this year had bolstered her confidence that inflation would move back toward the Fed’s 2 percent goal.
http://www.bloomberg.com/news/articles/2015-12-16/fed-ends-zero-rate-era-signals-4-quarter-point-2016-increases

[chud]

Ha ha! I saw the rate increase and tried to go straight to ZeroHedge, thinking: "I can't wait to read the comments over there" and it is down.
Came here next and saw your thread...

[chud]

At first it was "connection refused", now "no route to host".
Apparently a LOT of us thought of ZH when this rate announcement came.

[Shami-Amourae]

http://img.4plebs.org/boards/pol/image/1450/29/1450295078291.jpg

[Shami-Amourae]

/pol/ thread:
http://archive.4plebs.org/pol/thread/58574301/#58574380

[chud]

From ZH comments section: "And get a new server Tyler."

:-D

[mick silver]

it's good for stocks ............ StocksSee After-Hours Trading (http://money.cnn.com/data/afterhours) Data as of 4:39pm ET
Wednesday’s Close:


Dow (http://money.cnn.com/data/markets/dow) +224.18

17,749.09
+1.28%
Nasdaq (http://money.cnn.com/data/markets/nasdaq) +75.77

5,071.13
+1.52%
S&P (http://money.cnn.com/data/markets/sandp) +29.66

2,073.07

+1.45%


good for metals http://www.kitconet.com/images/sp_en_6.gif

[Cebu_4_2]

[QUOTE=mick silver;806174]it's good for stocks ............ {QUOTE]

A day or two then back to the whipsaw.

[Horn]

Making room so as not to go into negative interest rate territory, cause that just blows everyone's jew mind.

[singular_me]

from zero to 0.25 percent ;D

to catch up a little bit, it should have been 15%

never mind, more QEs are coming

[mick silver]

Baltic Dry Index + Watchlist
BDIY:IND




http://www.bloomberg.com/quote/BDIY:IND

471.00
13.00
2.69%


As of 08:04:55 ET on 12/16/2015.
Open
471.00

Day Range
471.00 - 471.00

Previous Close
484.00

52Wk Range
471.00 - 1,222.00

1 Yr Return
-43.79%

YTD Return
-39.77%



































Before it's here, it's on the Bloomberg Terminal. (http://bloom.bg/dg-ws-core-bcom-m1)

1M
1Y
5Y




+


Indicators
Rate of Change

Relative Strength

MACD

Volume








17192123252729Dec 13579111315
480500520540560580600



12/15484











http://ds.serving-sys.com/BurstingCachedScripts/Res/blank_1X1.gif












Open
471.00

Day Range
471.00 - 471.00

Previous Close
484.00

52Wk Range
471.00 - 1,222.00 Baltic Dry Index + Watchlist
BDIY:IND






471.00
13.00
2.69%

[mick silver]

The Baltic Dry Shipping Index Just Collapsed To An All-Time Record Low http://theeconomiccollapseblog.com/archives/the-baltic-dry-shipping-index-just-collapsed-to-an-all-time-record-low The Baltic Dry Shipping Index Just Collapsed To An All-Time Record Low
http://theeconomiccollapseblog.com/wp-content/themes/atahualpa/images/icons/user.gif By Michael Snyder, on November 19th, 2015

http://theeconomiccollapseblog.com/wp-content/plugins/simple-share-buttons-adder/buttons/pagepeel/facebook.png (http://www.facebook.com/sharer.php?u=http://theeconomiccollapseblog.com/archives/the-baltic-dry-shipping-index-just-collapsed-to-an-all-time-record-low)http://theeconomiccollapseblog.com/wp-content/plugins/simple-share-buttons-adder/buttons/pagepeel/twitter.png (http://twitter.com/share?url=http://theeconomiccollapseblog.com/archives/the-baltic-dry-shipping-index-just-collapsed-to-an-all-time-record-low&text=The+Baltic+Dry+Shipping+Index+Just+Collapsed+ To+An+All-Time+Record+Low+)http://theeconomiccollapseblog.com/wp-content/plugins/simple-share-buttons-adder/buttons/pagepeel/pinterest.png (javascript:void((function()%7Bvar%20e=document.cr eateElement('script');e.setAttribute('type','text/javascript');e.setAttribute('charset','UTF-8');e.setAttribute('src','//assets.pinterest.com/js/pinmarklet.js?r='+Math.random()*99999999);document .body.appendChild(e)%7D)());)http://theeconomiccollapseblog.com/wp-content/plugins/simple-share-buttons-adder/buttons/pagepeel/google.png (https://plus.google.com/share?url=http://theeconomiccollapseblog.com/archives/the-baltic-dry-shipping-index-just-collapsed-to-an-all-time-record-low)http://theeconomiccollapseblog.com/wp-content/plugins/simple-share-buttons-adder/buttons/pagepeel/linkedin.png (http://www.linkedin.com/shareArticle?mini=true&url=http://theeconomiccollapseblog.com/archives/the-baltic-dry-shipping-index-just-collapsed-to-an-all-time-record-low)http://theeconomiccollapseblog.com/wp-content/plugins/simple-share-buttons-adder/buttons/pagepeel/stumbleupon.png (http://www.stumbleupon.com/submit?url=http://theeconomiccollapseblog.com/archives/the-baltic-dry-shipping-index-just-collapsed-to-an-all-time-record-low&title=The Baltic Dry Shipping Index Just Collapsed To An All-Time Record Low)http://theeconomiccollapseblog.com/wp-content/plugins/simple-share-buttons-adder/buttons/pagepeel/email.png (?subject=The Baltic Dry Shipping Index Just Collapsed To An All-Time Record Low&body=%20http://theeconomiccollapseblog.com/archives/the-baltic-dry-shipping-index-just-collapsed-to-an-all-time-record-low)

http://theeconomiccollapseblog.com/wp-content/uploads/2015/11/Globe-Matrix-Public-Domain-460x331.jpg (http://theeconomiccollapseblog.com/archives/the-baltic-dry-shipping-index-just-collapsed-to-an-all-time-record-low/globe-matrix-public-domain)I was absolutely stunned to learn that the Baltic Dry Shipping Index had plummeted to a new all-time record low of 504 at one point on Thursday. I have written a number of articles lately about the dramatic slowdown in global trade (http://theeconomiccollapseblog.com/archives/we-have-never-seen-global-trade-collapse-this-dramatically-outside-of-a-major-recession), but I didn’t realize that things had gotten quite this bad already. Not even during the darkest moments of the last financial crisis did the Baltic Dry Shipping Index drop this low. Something doesn’t seem to be adding up, because the mainstream media keeps telling us that the global economy is doing just fine. In fact, the Federal Reserve is so confident in our “economic recovery” that they are getting ready to raise interest rates. Of course the truth is that there is no “economic recovery” on the horizon. In fact, as I wrote about yesterday (http://theeconomiccollapseblog.com/archives/if-the-economy-is-fine-why-are-so-many-hedge-funds-energy-companies-and-large-retailers-imploding), there are signs all around us that are indicating that we are heading directly into another major economic crisis. This staggering decline of the Baltic Dry Shipping Index is just another confirmation of what is directly ahead of us.
Overall, the Baltic Dry Index is down more than 60 percent (http://www.bloomberg.com/quote/BDIY:IND) over the past 12 months. Global demand for shipping is absolutely collapsing, and yet very few “experts” seem alarmed by this. If you are not familiar with the Baltic Dry Shipping Index, the following is a pretty good definition from Investopedia (http://www.investopedia.com/terms/b/baltic_dry_index.asp)…

A shipping and trade index created by the London-based Baltic Exchange (http://www.investopedia.com/terms/b/baltic-exchange.asp) that measures changes in the cost to transport raw materials (http://www.investopedia.com/terms/r/rawmaterials.asp) such as metals, grains and fossil fuels by sea. The Baltic Exchange directly contacts shipping brokers to assess price levels (http://www.investopedia.com/terms/p/price_level.asp) for a given route, product to transport and time to delivery (speed).
The Baltic Dry Index is a composite of three sub-indexes that measure different sizes of dry bulk carriers (merchant ships) – Capesize, Supramax and Panamax. Multiple geographic routes are evaluated for each index to give depth to the index’s (http://www.investopedia.com/video/play/index/) composite measurement.
It is also known as the “Dry Bulk Index”.
Much of the decline of the Baltic Dry Shipping Index is being blamed on China. The following comes from a Bloomberg report (http://www.bloomberg.com/news/articles/2015-11-19/baltic-dry-ship-index-drops-to-record-as-iron-ore-growth-slump) that was posted on Thursday…

The cost of shipping commodities fell to a record, amid signs that Chinese demand growth for iron ore and coal is slowing, hurting the industry’s biggest source of cargoes.
The Baltic Dry Index, a measure of shipping rates for everything from coal to ore to grains, fell to 504 points on Thursday, the lowest data from the London-based Baltic Exchange going back to 1985. Among the causes of shipowners’ pain is slowing economic growth in China, which is translating into weakening demand for imported iron ore that’s used to make the steel.
So many of the exact same patterns that we witnessed back in 2008 are playing out once again in front of our very eyes. Below, I have shared a chart that was posted by Zero Hedge (http://www.zerohedge.com/news/2015-11-19/today-baltic-dry-freight-index-has-never-been-lower), and it shows how the Baltic Dry Shipping Index absolutely collapsed in 2008 as we headed into a major financial crisis. Well, now the Index is collapsing again, and it is already lower than it was at any point back in 2008…
http://theeconomiccollapseblog.com/wp-content/uploads/2015/11/Baltic-Dry-Index-Zero-Hedge-460x240.jpg (http://amzn.to/1OTbHUE)
The evidence continues to mount that we are steamrolling toward a deflationary economic slowdown that is worldwide in scope.
Just look at the price of U.S. oil. It just keeps on falling, and as I write this article it is sitting at $40.40.
The price of oil collapsed just before the financial crisis of 2008, and the same pattern is happening again.
And look at what is happening to commodities. The Thomson Reuters/CoreCommodity CRB Commodity Index has plummeted to the lowest level that we have seen since the last recession. It is now down more than 30 percent over the past 12 months, and it continues to fall.
So don’t be fooled by the temporary “stock market recovery” that we have witnessed. The underlying economic fundamentals continue to decline. We are entering a global deflationary recession, and the stock market will get the memo at some point just like we saw in 2008.
At this moment, global financial markets are teetering on the brink, and all it is going to take is some kind of major trigger event to send them tumbling over the edge.
And such an event may be coming sooner than you may think.
We live at a time when global terrorism is surging (http://endoftheamericandream.com/archives/obama-kissed-the-devil-and-now-pandoras-box-has-been-opened-and-all-hell-is-breaking-loose), relationships between nations are deteriorating and our planet is shaking in wild and unpredictable ways (http://theeconomiccollapseblog.com/archives/violent-shaking-along-the-ring-of-fire-continues-a-progression-of-disasters-that-began-in-september).
It wouldn’t take much to push the financial world into full-blown panic mode. A major regional war in the Middle East, a terror attack that kills thousands, or an earthquake or volcanic eruption that affects a large U.S. city are all potential examples of “black swan events” which could fit the bill.
The global financial system has never been more primed for another 2008-style crisis. Thanks to the fragility of the system, it could literally happen any day now.
So keep your eyes open – within weeks our world could be completely and totally different.

[mick silver]

Baltic Dry Index + Watchlist
BDIY:IND






471.00
13.00
2.69%


As of 08:04:55 ET on 12/16/2015.

[mick silver]

U.S. StocksSee Pre-Market Trading (http://money.cnn.com/data/premarket) Data as of Dec 17
Thursday’s Close:


Dow (http://money.cnn.com/data/markets/dow) -253.25

17,495.84
-1.43%
Nasdaq (http://money.cnn.com/data/markets/nasdaq) -68.579

5,002.55
-1.35%
S&P (http://money.cnn.com/data/markets/sandp) -31.18

2,041.89
-1.50%

[mick silver]

U.S. StocksData as of 3:59:11pm ET
Friday’s Trading:


Dow (http://money.cnn.com/data/markets/dow) -347.21

17,148.63
-1.98%
Nasdaq (http://money.cnn.com/data/markets/nasdaq) -75.73

4,926.82
-1.51%
S&P (http://money.cnn.com/data/markets/sandp) -34.80

2,007.09

[mick silver]

The epic oil crash could end next year. But before prices start climbing higher, they could go even lower. It's been a catastrophic 18 months for crude oil, which has suffered a dramatic 68% plunge due to a massive supply glut. Oil fell to a fresh seven-year low below $34.50 a barrel on Friday.





The collapse in prices has wreaked havoc on the industry, causing tens of thousands of job losses (http://money.cnn.com/2015/09/03/investing/cheap-oil-job-cuts/?iid=EL), a surge in corporate defaults (http://money.cnn.com/2015/12/10/investing/oil-prices-bond-defaults/index.html?iid=EL) and plunging stock prices.
Many Wall Street oil experts believe that prices will rebound in late 2016. Yet more pain may be inflicted -- some say it's actually needed -- before prices bounce higher.
"It's still a long road ahead. The oversupply problem will be with us for a little while," said Mike Wittner, global head of oil research at Societe Generale.
Goldman Sachs wagers that crude oil will average $38 a barrel in February. That's lower than prices were for most of this year.
The problem is that the long-awaited "rebalancing" of the global oil market has yet to happen.
In other words, the world's supply of oil remains far above its demand. The supply glut was mostly created by skyrocketing American production.
But OPEC, led by Saudi Arabia, has exacerbated the issue by pumping oil ferociously (http://money.cnn.com/2015/12/10/investing/oil-prices-opec-record/index.html?iid=EL). It's a strategy designed partly to pressure American producers out of the market. (http://money.cnn.com/2015/12/11/investing/oil-opec-winning-iea/index.html?iid=EL)
OPEC declined to cut production when it met earlier this month (http://money.cnn.com/2015/12/04/investing/opec-meeting-oil-prices-saudi-arabia/index.html?iid=EL), reinforcing the idea it's not coming to the rescue of oil markets.
http://i2.cdn.turner.com/money/dam/assets/151217122739-oil-prices-2015-780x439.png Goldman thinks oil could drop to $20
Cheap oil has caused U.S. output to decline from its April 2015 peak -- but not by enough to reduce the global glut, yet.
In fact, the oversupply problem had gotten so bad that there was a "traffic jam" of oil tankers (http://money.cnn.com/2015/11/22/investing/oil-glut-tanker-traffic-jam/index.html?iid=EL) waiting to be offloaded off the U.S. Gulf Coast in November because there was nowhere to put the crude.
Related: Epic oil glut sparks super tanker 'traffic jams' at sea (http://money.cnn.com/2015/11/22/investing/oil-glut-tanker-traffic-jam/index.html?iid=EL)
A growing number of American oil producers with lots of debt are facing financial problems (see: junk bond market chaos (http://money.cnn.com/2015/12/15/investing/high-yield-junk-bond-crisis/index.html?iid=EL)), but stronger oil companies like ConocoPhillips (COP (http://money.cnn.com/quote/quote.html?symb=COP&source=story_quote_link)) and Chevron (CVX (http://money.cnn.com/quote/quote.html?symb=CVX&source=story_quote_link)) continue to chug along with plans to pump more oil.
"Financial stress may prove too little too late...We still see high risks that prices may decline further," Courvalin wrote.
Goldman Sachs says oil may need to tumble to "around" $20 a barrel -- something that hasn't happened since 2002 -- to force meaningful production cuts.
Iran's return to the oil market (http://money.cnn.com/2015/11/24/news/economy/iran-oil-giant-revival/index.html?iid=EL) is also looming over prices. Sanctions could be lifted as early as January and Iranian officials have defiantly declared they will ramp up production (http://money.cnn.com/2015/12/14/investing/oil-prices-below-35-iran-exports/index.html?iid=EL) despite the price crash.
At the same time, global oil inventories are brimming at record levels. Goldman said there is a "too close for comfort" risk that storage limits could actually be reached early in 2016.
All of this is great news for American drivers (http://money.cnn.com/2015/12/16/news/economy/gas-savings-this-year/index.html?iid=EL), many of whom have benefited as gasoline prices near $2 a gallon nationally.
Tom Kloza, chief oil analyst at the Oil Price Information Service, says gas prices could drop to as low as $1.79 by early February. However, he warned that prices at the pump are likely to quickly rebound to the $2.50-range after bottoming.
Related: $320 billion to disappear from oil budgets (http://money.cnn.com/2015/12/11/investing/oil-spending-cuts-chevron-conocophillips/index.html?iid=EL)
Oil can't fall forever
No matter where oil prices eventually fall to, many observers believe a rebound will materialize late in 2016.
Societe Generale predicts oil could rise to $51 a barrel in the third quarter and then $56 a barrel in the fourth quarter.
"In the second half of next year, the market will see light at the end of the tunnel," said Societe Generale's Wittner.
Longer term, energy investment manager Tortoise Capital thinks oil will need to rise to the $60-to-$80 range to meet growing global demand.
But don't bank on a return to $100
Still, there seems little risk of crude oil returning any time soon to $100.
"I don't see it this decade without a geopolitical event that's somewhere between horrible and cataclysmic," said Kloza.
It's a sign of just how much the U.S. energy boom has reshaped the landscape. As soon as prices go back into the $60s and $70s, oil wells that have been tapped but not yet completed can be quickly turned on, lifting American output and lowering prices.
And then there's the U.S. oil export ban, which is likely to be killed (http://money.cnn.com/2015/12/16/investing/oil-prices-export-ban-congress-deal/index.html?iid=EL) as part of the spending bill in Congress. Lifting the restriction will only encourage greater American production in the future.
Related: Russia is bracing for $30 oil in 2016 (http://money.cnn.com/2015/12/14/news/economy/russia-30-oil-budget/index.html?iid=EL)

[mick silver]

http://www.kitconet.com/images/sp_en_6.gif

[mick silver]

Forget Santa Claus rally. All Wall Street is getting these days is a lump of red ink. The Dow plunged 367 points on Friday, its fourth-biggest decline of the year. The S&P 500 retreated 1.8% and the Nasdaq lost 1.6%.





The wave of selling came from a slew of factors, including renewed concerns about the impact of the Federal Reserve's first interest rate hike in almost a decade (http://money.cnn.com/2015/12/16/news/economy/federal-reserve-interest-rate-hike/index.html?iid=EL) and the pace future increases. Even though the move represented the central bank's vote of confidence in the U.S. economy, it comes during a delicate time for the global economy amid China's slowdown.
"The Fed took its step in the context of an earnings and revenue recession and sluggish growth. That's not the best time to do it," said Peter Boockvar, chief market analyst at The Lindsey Group.
The other big cloud that's hovering over the stock market is China and the effect of its slowdown in the global economy.
http://i2.cdn.turner.com/money/dam/assets/150902143245-markets-negative-780x439.png Concerns about China's economic slowdown were heightened by a new research report that showed a number of metrics deteriorated in the fourth quarter. The China Beige Book International warned China's economy, the world's second biggest, is in "dangerous" territory. (http://money.cnn.com/2015/12/17/news/economy/china-growth-real-beige-book/index.html?iid=EL)
All sectors from retail to transportation have suffered, with the country's two most important industries -- manufacturing and services -- also on the decline.
After initially rallying after Wednesday's rate hike (http://money.cnn.com/2015/12/16/investing/stocks-markets-fed-rate-hike-interest-rates/index.html?iid=EL), the Dow plummeted 620 points in the final two days of the week. That's the worst back-to-back day of losses for the Dow since the late August market freakout.
Meanwhile, selling was amplified by seasonal factors in the markets, including the expiration of options.
"End-of-the-year moves get exaggerated up or down. No one wants to miss a rally -- or a selloff," said Boockvar.