Federal Reserve may keep interest rates at zero for longer as officials fear dampening recovery

The FOMC said after its last meeting it “can be patient” as it considers when to raise the benchmark interest rate, even as it described the labour market as “strong.” A report the following week showed payrolls rose more than forecast in January to cap the strongest three-month gain in 17 years. 

Policy makers also discussed risks to the global economy. In their last statement they added “international developments” to the list of issues they will take into account when determining when to raise rates, in addition to employment, inflation and financial markets.

DYI comments:  The very possible and becoming more probable of world wide recession, it is no wonder the Fed's are discussing the global economy.

Wall Street’s Calling The Sheep: Buy The Dip Now, Join The Slaughter Later

Instead, we are in the crack-up phase of the two decades long central bank driven credit boom that has literally engulfed the planet. The resulting tidal wave of deflation owing to massive overinvestment and malinvestment in the worlds’ resource, manufacturing, transportation and distribution sectors will drive worldwide prices, profits and wages in a southward direction as excess supply slams up against inadequate demand. 

The chart below on the Baltic dry index is not a one-off oddity in the “incoming data.” It is, in fact, the incoming alert that the Wall Street recovery and decoupling stories are completely bogus and that the sheep are once more fixing to join the slaughter.

 

DYI Continues:  Don't be surprised when Treasury yields are below 2% for 30 year and below 1% for ten year paper as the world wide recession unfolds.  A very real possibility. How long the U.S. can be the lone wolf of growth (as good as it is) is anyone's guess.  I'm not in the camp that the U.S. will decouple over time the U.S. will catch up.  Currently it appears our neighbors to the north Canada are in recession, I don't think the U.S. is long behind.

DYI