Photo Credit: Day Donaldson
Comments
- I will still argue that this was a nothing-burger. The patience language was eliminated, but what were left in its place were contingent conditions that are subject to a wide degree of interpretation.
- Pretty much a nothing-burger. Few significant changes. The FOMC has a weaker view of GDP and exports.
- Despite lower unemployment levels, labor market conditions are still pretty punk. Much of the unemployment rate improvement comes more from discouraged workers, and part-time workers. Wage growth is weak also.
- Forward inflation expectations have continued to fall.
- Equities rise and long bonds rise. Commodity prices rise and the dollar falls. The FOMC says that any future change to policy is contingent on almost everything.
- Don’t know they keep an optimistic view of GDP growth, especially amid falling monetary velocity.
- The FOMC actually chops out “dead wood†from its statement. Brief communication is clear communication. If a sentence doesn’t change often, remove it.
- The key variables on Fed Policy are capacity utilization, labor market indicators, inflation trends, and inflation expectations. As a result, the FOMC ain’t moving rates up, absent improvement in labor market indicators, much higher inflation, or a US Dollar crisis.
- We have a congress of doves for 2015 on the FOMC. Things will be boring as far as dissents go. We need some people in the Fed and in the government who realize that balance sheets matter – for households, corporations, governments, and central banks. Remove anyone who is a neoclassical economist – they missed the last crisis; they will miss the next one.
