What Does Data-Dependent Mean?

Fed Minutes released from their October meeting didn’t change anything.

They’re still determined to raise interest rates slightly while at the same time remaining “data dependent”.

What does that mean frankly?

Aside from the important employment report released after the last meeting, data overall remains quite weak. There is another employment report the first week of December with their next meeting on December 15^th. They may just focus and cherry-pick their version of employment data ignoring other reports saying they’re weakness is due to the strong dollar.

“Their version” of employment only views the headline data without much view of the details like high part time work, weak participation, low wage jobs and etc. And, even on Wednesday Wall Street insider and Fed Governor Dudley (Goldman Sachs) stated increasing interest rates was all about inspiring “confidence”.  

Not to be left out, Fed Governor Lacker stated “Global financial markets have settled since the August turmoil that caused the U.S. Federal Reserve to delay raising interest rates, so that it will soon be appropriate to make the change in policy, conditioned on no marked deterioration in economic in economic conditions.”

Translation: it’s all about the stock market vs anything else. Bulls “get it” that this Fed will always will always be there for Wall & Broad.

Counting on the latter stocks rallied sharply since data dependent only mean it’s just a throw-away line. Stocks become sup-expensive once again.

Market sectors moving higher included:Mostly everything with a ticker symbol.

Market sectors moving lower included: Volatility (VIX) and not much else.

The top ETF daily market movers by percentage change in volume whether rising or falling is available daily.

Volume was about average for the period with heaviest at Fed Minutes release. Breadth per the WSJ was positive. 

The last two weeks have featured two nearly -200 point & two -200 point trading days. This doesn’t give anyone save the HFTs reason to pause.

I was headline reading, this like others caught my eye: “Stocks Rally as Investors Brace For Possible Rate Hike” (WSJ). That’s about as contradictory a headline as you might expect given common historical experience. It seems even the WSJ now loves big brother.

As to the Fed, they’ve become desperate to raise interest rates signaling they’ve left their “emergency monetary policies” around too long—maybe at least a few years so.

Let’s see what happens.