Yesterday our fire department had its big annual fund raiser called Walker Day. It is a long day for everyone involved but we raise about 25% of our annual expenses with the one day so it is a must. My wife and I (more my wife) run the raffle which, like all "jobs" along these lines, is tough work as people complain about one thing or another. The same people are winning, you are going too fast, you are going too slow, "you know if you did it this way...." and so on.
Making everyone happy is not possible and that is that.
So it is with Ben Bernanke and fun bunch as they convene this week to raise rates to 5.25% and follow up with vague statements about their next step.
Hmmm, they are not raising fast enough, they are going too fast, "you know if they did it this way...." and so on.
The Fed is going to do whatever they do this week and chances are you will not be 100% happy. There is even a greater likelihood that things will be no clearer after the statement. If they were data dependent before, wouldn't they have to be data dependent for the rest of the summer if not longer?
There are some differences with life under Ben than Alan. I have heard some say that it makes no sense to blame the Fed for this selloff we have had and while that is probably true, volatility has increased and I do believe that the differing comments (think Yellen compared to Moskowitz) has played a role as Fed comments have caused big moves (if only for a couple of hours) in both directions.
Ben wants to be more direct (or blunt if you please) than Greenspan was. Apparently this has not made a good first impression but we will have to live with it for a while.
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3 comments:
A rationale and accurate prediction: no one will be happy. I agree with your comments. Ben has two objectives: convince others that inflation fighting is more important than short term economic grwoth; and, that mob mentality on the street will have to get use to his flexible data dependence stance---he can't be blunt about what can't be predicted. Roger...my question is how will global equity mkts be affected. In the past, basic industrial materials stocks take a sharp downturn...so implied by a news story by street/sector historian Sam Stoval. I think now it MAY BE different--foreign growth in Asia is more independent of our domestic economic forces. Merger appetite in oil and basic industrial matrials is an example of its sustainable strength. IYM (an etf) represents this sector and my bet is that now is a good time to buy it...quite contrary to cnventional wisdom that says beware of reduced liquidity you're better off buying defensive stocks like consumer staples. What do you think?
great question/comment.
What I think will make for a good post. Please check back Monday morning.
TY
“,,,data dependent for the rest of the summer...”
I got news for the country, the FED always has and always will be data dependent. The debate is in what data and are they interpreting it properly. I can not believe this data dependent quote has gotten so much press.
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