While stocks were somewhat soft in early trading and bond yields a little lower, comments from Atlanta Fed President Lockhart were not received well (See chart above).

It’s not like he bashed the market, he is actually calling for GDP growth of 2.5%-3.0% (we expect 3.0%) in 2014.

But, his comments effectively gave the green light to the Fed’s $10Bn taper. Lockhart also confirmed the Fed was data dependent and will determine its next move at each meeting. In other words, the Fed taper was not on a predetermined course, a view we have heard before from a number of Fed officials.

Stocks want a more bullish assessment, even as Lockhart said “we are entering this year on a more solid economic footing”; there’s “growing confidence” behind outlook for 2014.

Or markets want comments that suggested the economy and labour market wasn’t that strong which would mean the Fed could delay further tapering. In short, “more stimulus, please!”

So risk markets either want definitive evidence that growth was quickening or evidence that the economy isn’t that good and the Fed will delay its taper.

Anything middle of the road, which was the theme of Lockhart’s comments as his comments were largely in line with market and perhaps Fed consensus thinking, is not sitting well with some investors. And with stocks sliding lower bonds are rallying accordingly.

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