Instead of the usual posts on the FOMC meeting (Parsing the Fed and Economist’s reactions), today we will instead quote John Rutledge, who has exactly the right snark on the Fed:
"They, the Fed watchers, will carefully examine the memo, checking its wording, its spelling, its punctuation, and the rag content of the paper it is printed on.
My personal position is 3.5%, exactly the same words, 2 spelling errors, a comma changed to a semi-colon in the second to last line (Is this significant?), and 25% rag content. I am neutral on the ink color.
Last time the Fed watchers got pretty excited about what looked like a change in wording, but it turned out to be drool from one of the older members who fell asleep while signing the memo. False alarm.
The FOMC members, of course, have been watching out the windows all day, wondering how the Fed watchers will interpret their words. The psychology so thick you can cut it with a chain saw.
Nothing more needs to be said . . .
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Source:
Put down your Dictionaries and Back Away Slowly
Dr. John Rutledge
August 09, 2005
http://www.rutledgeblog.com/askrutl/archives/cat_policy.html#a000134
Doesn’t anyone look at Money Supply anymore??? Check out this chart and see if you can tell when GW Bush took office.
http://www.economagic.com/em-cgi/charter.exe/fedstl/m1sl
It’s only a matter of time before the Fed’s “pedal to the metal” money supply policy starts to have a real affect on “core” prices.
It’s interesting to note that the Fed seems to be taking their foot off the pedal in recent months but it may be too little too late. The bubble has already formed in the housing market and now the Fed feels compelled to pop that bubble too. Oh well….