“It was only a month ago Fed President Dudley was lecturing us about the dangers of overly easy financial conditions and how inflation’s sanguine performance was ‘transitory.’ And it wasn’t like he was alone. The Fed’s generally accepted second in command, Stanley Fischer, echoed similar comments.
Well, this morning about the most awkward economic news possible was released. CPI undershot, coming in at 1.6% instead of the expected 1.7%. Retail sales were abysmal, registering -0.2% instead of the forecasted 0.1% gain. And the University of Michigan sentiment numbers reflected a public who is becoming increasingly skeptical of the Fed’s rosy outlook. The actual index was 93.1 instead of the surveyed 95.0, but more importantly, expectations plummeted to 80.2 instead of 84.4.”
MK note: More and more it is looking like the Fed is not getting the results it intended. The dollar fell and gold rose. More confirmation of what Pete Grant has been talking about on this page for months now. The much discussed year-end rate hike is looking less likely this weekend, could open the door to further gold upside next week.