Trump Speaks to Congress Tonight, Kellyanne Conway’s Couchgate: P.M. Links

  • KACPresident Trump will deliver his address to Congress tonight at 9:00 p.m. Reason writers will be providing live coverage here at and on Twitter.
  • Is it constitutional for the Trump administration to bar certain reporters from press briefings?
  • Kellyanne Conway put her feet on the Oval Office couch.
  • Education Secretary Betsy DeVos described historically-black colleges as early examples of school choice.
  • Social justice college course of the day.
  • I was on the Federalist Radio podcast with Ben Domenech, talking CPAC, the Oscars, and campus due process. Listen here.

from Hit & Run

New Jersey Set To Ban Flavored Vaping Fluid, Protecting Kids From Something They Can’t Buy Anyway

Lawmakers in New Jersey are moving to ban the sale of flavored vaping products, in an effort to stop children from being interested in a product that they are not allowed to buy in the first place.

The state already has a ban on flavored tobacco products, with only clove, menthol, and tobacco flavors allowed, and a bill advancing through the state legislature would extend that ban to electronic cigarettes too. The bill advanced out of the the Assembly’s health committee on Monday.

Its for the kids, state Del. Herb Conaway (D-Burlington), tells

“The appeal of electronic smoking devices is just as bad, if not worse, because the products are available in almost every candy-like flavor imaginable,” Conaway said. “From a public health perspective, it makes sense to extend the ban on flavored tobacco products to electronic smoking devices, as well.”

Sure, but here’s the thing: it’s already illegal for anyone under the age of 19 (only a gubernatorial veto prevented it from being 21) to buy cigarettes or e-cigarettes in the state of New Jersey. Kids aren’t buying flavored vaping fluid for their e-cigs, but adults who want to vape something that doesn’t taste awful might be interested in doing exactly that.

No matter, because the mere existence of flavored e-cigarette options on the market is apparently enough to lure children into smoking—just like how the existence of cherry-flavored beer is luring children into being alcoholics, natch.

Then there’s the question of whether states should be making e-cigarettes less desirable. They’re safer than traditional, combustible cigarettes because they contain no tobacco and don’t require burning—thus they don’t fill a user’s lungs with tar and soot—while still giving a jolt of nicotine. If we want to shape public policy to steer people away from dangerous health choices like smoking, then it makes sense to make e-cigarettes seem like a more attractive option, even if that includes using “almost every candy-like flavor imaginable” as a marketing tool.

But what about the children? Despite what Conaway—and others, including the Center for Disease Control—might say, there is little evidence that vaping is a gateway to smoking, whether among teenagers or within the general public. Smoking rates have fallen to all-time lows, even as vaping rates have increased. If using an e-cigarette was a gateway to smoking a traditional cigarette, you’d expect to see a corresponding uptick in smoking along with vaping.

As Reason’s Jacob Sullum has noted, data from the 2014 National Youth Tobacco Survey, biostatistician Hongying Dai and economist Jianqiang Hao found that nonsmokers who had used an e-cigarette in the previous month were less likely than other nonsmokers to rule out trying tobacco cigarettes in the future.

That is not terribly surprising, says Sullum, since just 3 percent of teenagers who had never smoked reported past-month e-cigarette use. That a small minority is apt to differ from the remaining 97 percent in traits, such as rebelliousness, risk aversion, and sensation seeking, that might affect the propensity to experiment with smoking.

Those facts apparently aren’t welcome in Trenton, where the narrative of teens using e-cigarettes is rolling along. To stop those kids from breaking one law, more laws are needed.

And while they were at it, reports, the same state legislative committee voted Monday to make it illegal to use coupons to buy vaping products or for stores to offer promotional deals on e-cigarettes.

Because if you’re going to force people to use flavorless e-cigarettes, I guess you might as well make sure they’re paying full price too.

Conaway claimed the second bill also is about protecting the children. Despite the fact that anyone under 19 is prevented from buying tobacco or vaping products—even if they have a coupon, can you believe—she says kids “are still being exposed to promotional offers.”

“Banning discounts and promotions can help eliminate their curiosity and susceptibility to trying nicotine products,” she told

Yep, because there’s nothing that really gets the youths fired up like a good coupon.

from Hit & Run

Student Expelled for Rape Says Amherst Discriminates Against Men, Court Says He’s Got a Point

AmherstA former student, “John Doe,” has sued Amherst College for wrongfully expelling him after a female student accused him of sexual misconduct. The case is notable because Doe might have actually been the victim, rather than the perpetrator: he was incapacitated, she was not.

On Tuesday, Doe won a significant victory: a district court judge scrutinized Doe’s claims that Amherst violated his rights, breached its contract with him, and conducted an unfair extra-legal procedure. Several of the claims survived Amherst’s challenge, allowing the lawsuit to proceed to trial.

Of particular note, the judge thought Doe’s claim that Amherst discriminated against him on the basis of gender had some merit. The judge also ruled that Doe was right to assume the college would conduct a fair investigation.

“These are specific factual allegations that the College responded differently to similar reports when the genders of the potential victims and aggressors were different,” wrote Judge Mark Mastroianni. “They provide a foundation from which a court can infer gender-based discrimination may have played a role in the College’s responses.”

To recap: On the night of February 4-5, 2012, Doe and female student “Sandra Jones” began kissing each other in a common area. They then moved to Jones’ dorm room. Jones’ roommate, who was not there at the time, was in a relationship with Doe.

A sexual encounter began. Doe was blackout-drunk at the time, and later had no memory of what transpired. Jones had been drinking but was merely buzzed. She started to perform oral sex on Doe—what happened next is disputed. Jones would eventually characterize the encounter in several different ways: initially maintaining that it was ill-advised but consensual, later claiming that it began consensual but became nonconsensual, and ultimately describing herself as an unwilling participant.

Doe had no idea what happened but later asserted that he would never engage in sexual activity with someone who hadn’t consented.

After the encounter ended, Doe went back to his own dorm room and passed out. Jones texted a residential advisor and confessed that she had not been “an innocent bystander”. She also texted another male student and invited him over for sex. In subsequent text messages to the residential advisor, Jones complained that this second male student had to be badgered into having sex with her.

Months later, Jones wrote an essay about the encounter for a student publication. “It began consensually, but evolved into something that was decidedly not,” she wrote.

Doe read the essay and felt sorry about what had happened—though he still had no memory of it, and maintained that he had not engaged in non-consensual sex. He approached a student identified as “LR” in the lawsuit. LR worked at the student publication and had edited Jones’ essay. LR also served on Amherst’s Special Oversight Committee on Sexual Misconduct. According to the lawsuit, Doe “explained that while he still had no memory of his interaction with Jones, he hoped to get some guidance on what he could do to make amends to Jones.”

LR told him to seek counselling and continuing avoiding Jones. LR also treated this encounter as a sort of admission of wrongdoing on Doe’s part. LR reported Doe to Amherst’s Title IX team, and informed Jones that she would testify on Jones’ behalf if any complaint was made.

This was in April of 2013, more than a year after the initial encounter. Jones did not file her own complaint until October 28, 2013.

Amherst hired a lawyer, Allyson Kurker, to investigate the dispute. Intriguingly, this investigator wasn’t persuaded by LR’s assertion that Doe had confessed, and wrote in a report “LR’s testimony… conflicted with the testimony of others.”

The text messages Jones sent on the night of February 4-5 would have also conflicted with her own assertions about what happened. But these text messages were never reviewed by Amherst officials. Doe was found responsible for sexual misconduct and expelled.

Weeks later, having learned about the text messages that might have acquitted him, Doe asked the college to re-litigate the matter. Amherst refused.

His lawsuit contends, in part, that he was discriminated against because of his gender. There’s one specific detail that makes this claim plausible: Doe was incapacitated by alcohol at the time of the incident, and Jones was not. Amherst’s sexual misconduct policy stipulates that incapacitated individuals cannot consent to sexual activity. It’s therefore possible to argue that Jones could not have had consent to initiate sexuality activity with Doe in the first place—which would mean Jones had engaged in sexual misconduct.

But Amherst officials showed no interest in pursuing this possibility. They did not make any effort to uncover evidence that would have supported it. No one pressed Doe to file a Title IX complaint against Jones.

For these reasons, Doe’s contention that he was subjected to gender discrimination—in addition to breach of contract and unfair treatment in general—cannot be dismissed, according to the judge’s ruling.

KC Johnson, a professor of history at Brooklyn College and co-author of the new book The Campus Rape Frenzy, writes that this judge has a “dubious” record on campus due process issues. The fact that Mastroianni “nonetheless sides with the accused student on all core elements” of the lawsuit is very good news for Doe’s case, says Johnson.

from Hit & Run

Trump, Navigable Waters, and the EPA’s WOTUS Regulations

EPAWOTUSMapIn 2015, the Environmental Protection Agency issued a new Clean Water Rule, a.k.a. Waters of the U.S. (WOTUS) rules defining the jurisdiction of the agency over rivers, lakes, creeks, estuaries, ponds, swamps, prairie potholes, irrigation ditches, and intermittent rivulets. The new rules were based on the EPA’s interpretation of the provisions of the 1972 Clean Water Act that mandated that the agency devise “comprehensive progams for water pollution control” aimed at “preventing, reducing, or eliminating the pollution of the navigable waters and ground waters and improving the sanitary condition of surface and underground waters.” The agency reasoned that it had authority to regulate non-navigable upstream water sources like farm ponds and intermittent streams since they could carry pollution down to navigable waters like lakes and rivers. These new rules brought nearly half of Alaska and a total area in the lower 48 states equivalent to the size of California under the Clean Water Act’s jurisdiction.

The upshot is that under the new more extensive regulations, ranchers, farmers, and property developers had to seek permission from the U.S. Army of Corps of Engineers to make changes that might affect minor sources of water on their land. Obtaining permits could take years and cost thousands of dollars. At least 32 states have sued to prevent the new regulations from taking effect, and the Sixth Federal Appeals Circuit Court stayed the new rules in October, 2016.

At the Conservative Political Action Conference meeting last week, new EPA Administrator Scott Pruitt declared that the Obama administration’s WOTUS regulation had “made puddles and dry creek beds across this country subject to the jurisdiction of Washington DC. That’s going to change.” The new executive order that President Trump is expected to sign today directs that EPA to reopen the rulemaking process to repeal and revise the WOTUS rules. The agency is explicitly told to use the standards set out in former Supreme Court Justice Antonin Scalia’s plurality opinion in the 2006 Rapanos vs. United States case. In his opinion, Scalia declared:

In sum, on its only plausible interpretation, the phrase “the waters of the United States” includes only those relatively permanent, standing or continuously flowing bodies of water “forming geographic features” that are described in ordinary parlance as “streams[,] … oceans, rivers, [and] lakes.” See Webster’s Second 2882. The phrase does not include channels through which water flows intermittently or ephemerally, or channels that periodically provide drainage for rainfall. The Corps’ expansive interpretation of the “the waters of the United States” is thus not “based on a permissible construction of the statute.”

Of course, various activist groups are alarmed at the potential rollback of EPA authority. For example, Trout Unlimited issued a statement:

Gravity works cheap, and it never takes a day off. The Administration cannot stop water flowing downhill—and we all live downstream. To be effective, the Clean Water Act must be able to control pollution at its source, upstream in the headwaters and wetlands that flow downstream through communities to our major lakes, rivers, and bays. … If Justice Scalia’s direction is followed, 60 percent of U.S. streams and 20 million acres of wetlands would lose protection of the Clean Water Act; an unmitigated disaster for fish and wildlife, hunting and fishing, and clean water.

In favor of Trump’s new executive order American Farm Bureau Federation President Zippy Duvall declared:

President Trump’s executive order to ditch the Waters of the U.S. rule is a welcome relief to farmers and ranchers across the country today. The flawed WOTUS rule has proven to be nothing more than a federal land grab, aimed at telling farmers and ranchers how to run their businesses. The Environmental Protection Agency failed to listen to farmers’ and ranchers’ concerns when drafting the rule and instead created widespread confusion for agriculture. Under the rule, the smallest pond or ditch could be declared a federal waterway.

In any case, the EPA review process will take years to complete.

from Hit & Run

Sessions Hasn’t Read the DOJ Reports on Ferguson and Chicago Police

U.S. Attorney General Jeff Sessions told reporters Monday he has not read the Justice Department’s scathing reports on unconstitutional policing in Chicago and Ferguson, Missouri prepared under the Obama administration.

“I have not read those reports, frankly,” Sessions said in response to a question from The Huffington Post. “We’ve had summaries of them, and some of it was pretty anecdotal, and not so scientifically based.”

Those reports, part of an aggressive push under the Obama administration to beef up the Justice Department’s oversight of local police departments, found systematic civil rights violations, unconstitutional arrests, and excessive force by police. In Baltimore, police officers performed unconstitutional stops of pedestrians while Justice Department civil rights monitors were in the car with them. In Chicago, investigators found the police department did not even track gun discharges by officers that did not hit anyone.

If Sessions would care to familiarize himself with those reports, Reason has written several thorough summaries of what Justice Department investigators found. In Ferguson, the local police force essentially treated its poor and minority residents as a revenue stream, arresting them on petty and pointless charges, soaking them in court fees and fines, and then jailing them if they couldn’t afford it.

As my colleague Ed Krayewski wrote: “The DOJ found significant racial disparities in arrests, citations, and other police action, but its findings about the pattern and practice of Constitutional violations by the FPD pointed to fundamental problems with the policing, and not just its racially-disparate application. Namely, the DOJ found systemic abuses of the First and Fourth Amendment rights of Ferguson residents by the police department, through unconstitutional stops, the use of excessive force, and treating protected conduct, like recording police or complaining about police conduct.”

And in Chicago, Justice Department investigators found the department regularly failed to investigate potential witnesses of police misconduct, or in some cases intimidated and threatened witnesses who tried to come forward.

Nevertheless, Sessions has been a staunch defender of police amid calls for greater public accountability and reform following a string of high-profile shootings of unarmed black men over the past several years. “Sometimes local police departments really step up and do a great job and it’s almost disrespectful of them for the feds to go in and try to take it over,” Sessions said, according to Politico

Of course, it’s also disrespectful and illegal for police to violate someone’s constitutional rights, and even “anecdotal” violations matter quite a bit to the person whose rights are being violated.

The civil rights probes by the Justice Department laid the groundwork for a number of consent decrees between police departments, but Sessions said he hadn’t made a decision on whether the Justice Department would pursue a similar agreement with Chicago.

from Hit & Run

20-Year-Old Deported for Sex with 16-Year-Old, Which Isn’t Even Illegal in 43 States

CuffedWhen Juan Esquivel-Quintana was 20-years-old, he had a girlfriend who was 16. They had sex. Because this was in California, and because California has one of the highest ages of consent in America—18—and because he was more than three years older than his girlfriend, this was a crime.

Esquivel-Quintana pleaded no contest and went to jail for 90 days, in 2009. Afterward he was allowed to go on with his life, until he moved to Michigan to be closer to his family.

Then the feds began deportation proceedings. He was sent back to Mexico in 2013.

The facts are these: Esquivel-Quintana came to America from Mexico with his family at age 12. He was a lawful permanent resident. And the relationship he had is not even illegal in 43 other states—including Michigan.

But immigration officials said that since he’d been convicted of “sexual abuse of a minor,” off he had to go.

Yesterday this case made it to the Supreme Court. As WDET reports:

The dispute is a growing part of the national legal landscape as federal lawmakers add more types of criminal offenses to the list of what makes immigrants deportable, says Andrew Moore, associate professor at University of Detroit Mercy School of Law.

“The challenge is that for some of the grounds that our federal immigration law identifies as being grounds for being deportable are very, very broad,” he says. “For example there’s one whole category called the ‘crime involving moral turpitude.’ Now, of course, nobody at the state level is ever convicted of a crime involving moral turpitude so the challenge is trying to fit whether the state offense fits into this broad category.”

Allon Kedem, assistant to the U.S. Solicitor General, argued that Esquivel-Quintana was unworthy of remaining in this country because his crime was so great. “When there’s a meaningful age difference, such that the perpetrator and victim are not in the same age group, as a result of that, the victim may not be able to advocate for themselves.”

Somehow the girl is a “victim” in seven states, and a perfectly capable young woman in the rest. Hmm. As Jeffrey Fisher, Esquivel-Quintana’s lawyer, argued, “You have an extraordinary case here, where the government is trying to deport somebody for committing something that isn’t even a crime under federal [law] and the vast majority of states.”

How about we don’t label sex as “abuse” in the first place, when there is zero evidence of force, trickery, or coercion? And then, how about we don’t throw people out of America for even more esoteric reasons, including relationships that are common and consensual?

The Court is expected to rule on the case sometime before June.

from Hit & Run

Everybody Agrees This Trans Wrestler Should Compete With Boys, but Government Is the Barrier

Mack BeggsMack Beggs should have been wrestling with the boys. Let’s just start with that, but note the lack of use of words like “required” or “mandated” or other suggestions of involuntary placement.

Beggs won the Texas state high school championship in his weight class over the weekend. This victory became international news because Beggs actually competed solely against and defeated girls. Beggs is transgender, transitioning from female to male. He is taking testosterone under a doctor’s care, which potentially gives him quite a leg up (pun fully intended) over his female competitors.

When something this awkward happens, inflexible regulations are often to blame, and that’s partly the case here. Texas’ athletics rules require athletes to participate in sex-segregated sports based on what they’ve listed on their birth certificates. And while steroids are generally banned substances for athletes, there is an exception for those who have doctor’s orders for valid medical treatments, as what has happened here.

So, really, it’s the state’s fault this all happened. And not a few people are angry about it. There has been a lawsuit by the parent of a competitor to try to stop Beggs from wrestling because the hormone treatments enhance muscle growth and give him an advantage (though also keep in mind that wrestling has weight classes to help control advantages that result from size differences). The Dallas News notes that the controversy probably wouldn’t have happened in other states because Beggs would have been wrestling males.

The News also suggests that the rule might not be changing anytime soon, so Beggs, currently a junior, could be put in this position again next year.

As is typical with transgender issues, there’s an interest in trying to push through the simplest possible solution that happens to align with one’s pre-existing issues of the cultural conflict. Accommodate everybody who declares themselves transgender! Or refuse to accommodate transgender people at all and insist it’s not a real thing!

The first solution leads to fears of gaming the system—that athletes will take advantage, in this case men competing as women, obviously. It smacks of the same argument about transgender women in bathrooms—the idea that predatory men who are not actually transgender will “take advantage” of the law and use it to victimize women and avoid the consequences. It’s a creepy attitude, denying one group of citizens appropriate treatment out of fears that some other group of people will do bad things as a consequence. Consider this approach in the terms of nanny state bans and the justifications for the drug war and realize that it’s awful.

As far as the second solution, it’s a terrible idea for a state school system or government to weigh in on the scientific validity of transgender people. It’s not for the state to decide whether somebody’s experience changing gender is based on something real or not. It’s a situation that exists and will continue to exist. It’s not going to go away. I’ve previously argued against government bans on “reparative therapy” (the idea that homosexuality and transgenderism can be “cured” with psychotherapy) partly because it puts the government in the position of determining what is and is not a legitimate application of social science. To the extent that the fields of psychology and child development and several other social sciences are still trying to navigate the increasing numbers of youths identifying as transgender, it’s not a situation that calls for government referees.

Unfortunately, as the school bathroom and facilities battles have highlighted, federal discrimination law and Title IX have put the government in the position of having to play a role. Government facilities should accommodate transgender people as much as possible for no reason other than acceptance that we control our own bodies and identities, not the government. Any government intervention based on a person’s identity should be based on legitimate claims of fraud.

In the case of Beggs, everybody seems to be in agreement here (well, except maybe for those who think Beggs shouldn’t wrestle at all, which is like trying to solve the public bathroom conflict by banning transgender people from using them entirely): Beggs should be wrestling boys. If the hormone discrepancy is a source of conflict, maybe that’s a good reason for us to be rethinking what role the government plays in moderating performance-enhancing drugs in the first place. Reason’s written a ton on that subject.

There isn’t a real crisis here—which is itself a kind of fascinating look at how the needle has moved in public opinion on transgender issues. It’s a complex hammering out of a future that can be awkward and uncomfortable to see play out. The general government attitude should be a bias toward accommodation, but much like what happened with same-sex marriage recognition, the state and local-level fiddling and experimentation trying to hammer out policies are more likely to lead to comfortable communities than a blanket, top-down solution from the feds. And I say that as somebody who believes that the government should treat trans people according to their chosen sex.

from Hit & Run

Drug Theft and Abuse Plague the Veterans Affairs Department

Earlier in February, three Veterans Affairs employees were charged with conspiring to steal prescription medications from a hospital in Little Rock, Arkansas. The staffers attempted to order and divert 4,000 oxycodone pills, 3,300 hydrocodone pills, 308 ounces of promethazine with codeine syrups, and more than 14,000 Viagra and Cialis pills, costing the V.A. around $77,700.

The Associated Press also reported that back in 2015, a resident anesthesiologist at a V.A. medical center in West Los Angeles took a sedative and then injected himself with drugs. He passed out while providing anesthesia care to a veteran undergoing surgery. The staffer pleaded guilty to theft of public property and possession of a controlled substance.

These are just two of many examples of drug theft, loss, and misconduct plaguing Veterans Affairs hospitals across the country. A recent Associated Press report found that such incidents, particularly opioid–related ones, have sharply risen in recent years. There were 272 reported cases of drug loss or theft in V.A. hospitals in 2009; that number skyrocketed to 2,457 in 2016.

Part of the problem is that the institutions have been lax in tracking drug supplies, with congressional auditors discovering that at least four V.A. hospitals skipped monthly inspections of their drug stocks, per the AP report. Only 372 V.A. employees have been disciplined for incidents involving drug loss, theft, or misuse since 2010. This amounts to just 3 percent of cases resulting in disciplinary action, according to government data obtained by the AP. Additionally, the V.A. inspector general’s office found that many V.A. facilities failed to drug test 70 percent of potential employees, translating to 15,800 individuals.

To address the problem, the House Veterans Affairs Subcommittee convened a hearing on Monday with officials from the V.A. Department and the Mayo Clinic. “The use of illegal drugs by V.A. employees is inconsistent with the special trust placed in such employees who care for veterans,” Carolyn Clancy, a deputy undersecretary for the department, said. She promised that the V.A. is working hard to resolve the drug theft and abuse issue, but lawmakers did not seem convinced.

“In case after case, what we see are examples of drugs being diverted for personal use or personal gain, yet there does not seem to be much progress being made by V.A.,” Rep. Jack Bergman (R–Mich.) told the panel.

The department’s new secretary, David Shulkin, has pledged to work to repair its tarnished public image. In a one-on-one interview with Fox News‘ Pete Hegseth, he emphasized the importance of accountability.

“When you have one or two or three people who really aren’t doing their job, they bring everybody down,” Shulkin said. “And so the very best thing I know from my private-sector experience is you’ve got to deal with that, you’ve got to get them out of the system, because it helps not only the veterans, but the people who work in V.A. who are trying to do the right thing for veterans.”

from Hit & Run

The Stupidity of Jeff Sessions Could Single-Handedly Bring Down Trump

The corporate media would have you believe that the key to resisting Trump lies in the embrace of heinous individuals and institutions such as themselves, George W. Bush, and the CIA, as well as clownish figures manufactured by neocons such as Evan McMullin (formerly of both Goldman Sachs and the CIA). Ironically enough, though Trump supporters see these nefarious outside forces as the biggest threat to his administration, I believe that if Trump’s Presidency goes up in total flames it most likely will be the fault of the ridiculous fossil he chose as Attorney General, Jefferson Beauregard Sessions III.

Personally, I don’t think Trump cares one bit about recreational marijuana, but if he’s foolish enough to let Jeff Sessions run wild with his petty and moronic little Drug War, he runs a serious risk of having his administration destroyed from within. While the deep state and its various rent-seeking institutions are indeed very powerful, they are not popular amongst the American public for very good reasons. While they will continue to shamelessly and relentlessly target Trump for the most absurd of reasons (such as Russia conspiracy theories), I don’t think these tactics can bring Trump down. In fact, these blatant attacks tend to solidify Trump’s support amongst his base.

continue reading

from Liberty Blitzkrieg

March Hike Odds Soar Above 70% After Hawkish Assault From Dudley, Williams

Update: the March odds continue to surge and are now at 72% and rising.

The Fed is really doing its best to convince the market that a March rate hike is coming, and it seems to be working.

First, it was Philly Fed president Patrick Harker, who speaking at Temple University reiterated his comments from February 15, and said that not only is the economy in pretty good shape, but that he continues to see three rate increases as appropriate in 2017. 

Then, moments later San Fran Fed president John Williams, seapking in santa Cruz, said the Fed needs to ease its foot off gas gradually to avoid economy that’s “too hot”, and said that a rate increase is “very much on the table for serious consideration” at FOMC’s March 14-15 meeting. Williams, formerly an uber dove, also said that "right now interest rates are abnormallyh low."

Finally, moments after Williams, NY Fed president Bill Dudley spoke in a CNN TV interview – an odd venue for a FOMC member – and said that the case for a Fed tightening has become "a lot more compelling", adding that the phrase "fairly soon" used in the Minutes, means in the relatively near future. He also said that 3% growth is possible under certain condition, and further said that the Fed can't overreact to every stock-market move. He concluded that while "sentiment has improved markedly", confidence gains "haven’t translated yet into spending."

And result, Eurodollar and Fed Fund futures traders reacted as if stung, and trading below 50% earlier today, the March rate hike odds have soared as high as 68% over the past hour – they were at 54% before Dudley started talking – effectively above the Fed's permissive threshold. As a reminder, the Fed usually hikes only if the market prices in at least a 70% probability of such an event. Well, we are now almost there.


One question for now remains – why is the dollar not following through?


ForexLive has some ideas

There hasn't been much in the way of economic news in the past few days. Durable goods orders and GDP were weak; consumer confidence was strong. Fed speak was repetitious. But Fed funds futures hike probabilities have shot to 54% from 37% since Thursday.




One idea is pure manipulation. A bank that wants to see a hike might be buying Fed funds futures to try and somehow manipulate the Fed's thinking.


Or it could be some other kind of leak from the Fed?


Or maybe someone is just making a big bet it's going to happen as they take a closer look at the data.


What's curious is that the US dollar hasn't gone along for the ride. That suggests it's not fundamental.

While on the topic we note that 1 Year OIS topped 1.00% for the first time since Nov 2008…


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via Tyler Durden