Meeting odds were anchored by two speeches from the heart of the committee. The forward guidance couldn’t have been clearer. Ultimately the decision to hold only reinforced the perceived value of that guidance.
The meeting itself has become super awkward because the Fed Chair’s new approach is completely at odds with the communication architecture he’s inherited.
He doesn’t want to say anything but he still has a press conference. He doesn’t want to forecast but the Fed still has a dot plot. He doesn’t want to guide but he’s just outsourcing his authority to everyone else who does.
It’s a new leader but it’s still the old Fed.
The meeting itself has become super awkward because the Fed Chair’s new approach is completely at odds with the communication architecture he’s inherited.
He doesn’t want to say anything but he still has a press conference. He doesn’t want to forecast but the Fed still has a dot plot. He doesn’t want to guide but he’s just outsourcing his authority to everyone else who does.
It’s a new leader but it’s still the old Fed.
For all those lost souls in the Fedwatching business who have been complaining about how a lack of forward guidance will create excessive market volatility, yesterday was a rude awakening. The Fed reaction function could not have been clearer. And the market moves could not have been more subdued: the 10yr and the S&P500 have barely budged.View quoted post on X
