Fed Chickens Out Again, Fails To Raise For 55th Consecutive Time - FOMC Statement Comparison

Goldman wins again.

With a 54-0 record without a rate hike (better than Floyd Mayweather’s), and 58 Economisseds expecting no change, 3 a half-pregnant 13bps hike, and 53 expecting a 25bps hike, The Fed was always going to break someone’s heart today. Bond yields and the USD were tumbling into the decision, which appeared correct as The Fed chickened out again…

**FOMC: NO POLICY CHANGE, 0-0.25% TARGET ‘REMAINS APPROPRIATE’

**FOMC: GLOBAL ECON,FIN EVENTS ‘MAY RESTRAIN ECON ACTIVITY’

**FOMC: VOTE 9-1; LACKER DISSENTS, WANTED 25 BPS HIKE

Given the “no hike”, it is clear that, as we noted, Goldman is still in charge and Hilsy is still leaker-in-chief. All eyes now on the dot-plots as The Fed desperately tries to regain some credibility, stifle uncertainty, and calmly reassure markets that “we’ve got your back.”

Pre-FOMC: S&P Futs 2000.5, 10Y 2.26%, 2Y 77.5bps, EUR 1.1330, Gold $1118

Additional headlines include:

**FOMC LOWERS L-RUN EQUILIBRIUM FFR EST TO 3.5% V 3.8% JUNE

**FOMC: 11 PARTICIPANTS SEE FFR BELOW 0.5% END 2015 VS 7 JUNE

**FOMC: ECON WILL EXPAND MODERATE PACE W/ ‘APPROPRIATE’ ACCOM

*FOMC: LABOR MKT IMPROVED,’SOLID’ JOB GAINS, UNEMP DECLINING

*FOMC: ONE PARTICIPANT SEES NEGATIVE FFR END-2015 & END-2016

*FED: MKT-BASED MEASURES OF INFLATION COMPENSATION MOVED LOWER

Here are the key changes to the statement, which confirm the Fed’s third mandate is now official: global stability: