At the FOMC, anything goes!

They haven´t yet figured out that it´s the data that is Fed-dependent:

Federal Reserve Bank of San Francisco President John Williams played down a “low” reading on second-quarter U.S. growth and said the economy could still warrant as many as two interest-rate increases this yearor none.

“There’s definitely a data stream that could come through in the next couple of months that I think would be supportive of two rate increases,” Williams told reporters Friday after speaking in Cambridge, Massachusetts. “There’s data that we could get that wouldn’t be supportive of that — it could be one, maybe, or none. Time will tell.

Dallas Fed President Rob Kaplan, who also spoke Friday, echoed Williams’ wait-and-see attitude, saying he wouldn’t “overreact to one data point,” particularly because the report showed consumer spending continued to be strong.

“We’re still hopeful for solid GDP growth this year, and the basis for that is the consumer,” Kaplan told reporters at an event in Albuquerque, New Mexico,

For the past two years, both the nominal and real economy have been weakening. All the while, inflation has been “dead in the water”.

Anything Goes

4 thoughts on “At the FOMC, anything goes!

  1. Only a know-nothing moron would describe the GDP figure as “one data point”. Literally, it’s thousands and thousands of data points.

  2. If they were truly open-minded (so called data dependent), then he would have also mentioned that a rate Cut would also be possible. They want us to ignore that because they’d lose face. They could also consider cuts or increases other than 25 bps at a time. Thinking in quarter point moves made a little sense back in the days (almost 8 years ago now) when the Fed moved the Fed funds rate by selling or buying securities. But now it’s by fiat – changing the rate they want to pay on reserves. And why should the Fed pay more to borrow from banks overnight than the Treasury pays on its short term borrowings? Oh, and I share James Alexander’s frustration about know-nothing moronism. But it really frustrates, confuses and even scares me that I know these people are not stupid, yet somehow are just getting this all so wrong. Thanks for letting me vent. [smiley face]

  3. Sheesh. Put QE back on the table. Shouldn’t QE be the default when rates inflation growth are all very low?

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