Reviewing the Fed Statement
The Federal Open Market Committee (FOMC) statement and subsequent economic projections released by the Fed yesterday were generally in line with what I had been expecting. I did think the Fed would reveal that rate hikes were unlikely until 2014 and, while I was mildly surprised to see that explicitly stated in the release (we thought it would be apparent from the forward projections), the point remains the same. The Fed does not see growth picking up enough to warrant rate hikes for a long time.
Commentators seemed mixed as to whether this release was more hawkish or more dovish than market expectations. I think those that are calling the release hawkish are grasping at straws. You can safely ignore the fact that three Fed officials wanted to see rate hikes much sooner. We know who those three are: Jeffery Lacker (Richmond), Charles Plosser (Philadelphia) and Richard Fisher (Dallas). They have been dissenting and/or publicly arguing for tighter money for some time now. Regardless of whether they are right or not, they are clearly in the minority, and only Lacker is a current voter on the FOMC....678 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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