Well yes it is FOMC time again and its seems to me that it is all dovish again and that definitively the Fed will stay behind the curve as long as is needed to have 100% certainty that when they hit the brakes they will not send the economy back into a tailspin ..However this still plays well into my scenario of a forthcoming bond crash as in doing so they will leave ample time for investors to front run them when time comes to take this liquidity away (My next post looks at the ICI latest data release on US Mutual funds flows, so watch out…)…all this seems very bullish equity and bearish dollar if you ask me….but you may have already read my previous posts …anyhow I though I would try to go quantitative on the Fed semantics and try to see if we have any notable changes in their wording by creating a word cloud for their July release versus this September. Basically the script looks at the frequency of each words in the release and scale those words accordingly to the observed frequency. So the more repeated the word the bigger it is represented in the cloud. As you can see from the below it does not seem to be any material change…..same all same all….this monetary policy is not about to change…..
July release September release