Comments on: Draw in Your Talons, Oh Hawkish Ones!

By: apj

apj — Thu, 11 Aug 2011 07:42:45 +0000

that blip up in the core CPI (to only 1.6% mind you…) is just that. It’s about to head lower again.

Clearly the dissenters didn’t see that the output gap was reported to be WAY bigger than the ORIGINAL way-big number. I thought these people were supposed to be intelligent. it’s all so dreary…

By: Michael

Michael — Wed, 10 Aug 2011 00:58:11 +0000

Three members of the Fed remembered that there is a Dem in the White House who is up for reelection.

The others figured he was toast anyways.

By: D. C. Sessions

D. C. Sessions — Tue, 09 Aug 2011 23:29:21 +0000

Since the Fed’s effective inflation target is set to hold real-dollar wages constant [1], it follows that any signs of falling unemployment will trigger a swift tightening policy.

I’m just a wee bit surprised that even the current job market is too tight for several of them.

[1] To give them their due, they’ve done a splendid job for the last thirty years.

By: foosion

foosion — Tue, 09 Aug 2011 23:09:15 +0000

http://www.federalreserve.gov/monetarypolicy/files/fomcmoa19921117.pdf

By: foosion

foosion — Tue, 09 Aug 2011 23:08:35 +0000

Here’s the minutes of the meeting. See the vote and statement beginning at the bottom of page 3.

By: Matthew

Matthew — Tue, 09 Aug 2011 23:05:08 +0000

Just a thought which may be of some use; Perhaps the dissent was not over inflated concerns about inflation, but rather the predicament of whether to deliberately meddle with long term expectations of the market. ie. By setting a relatively fixed date, has the Fed set a precedent for the market with regards to semantics?

The answer is yes, though the impact, if any, is far from clear. In the future if the Fed announces a new round of QE, and they don’t provide a specified end date or magnitude, will the market react differently as a result of the specificity used in the low rates language?

It seems plausible that the dissension was related to deviating from the norm, rather than inflationary concerns. Of course the incredibly abnormal state of things doesn’t support adopting standard practice, never-mind voting against a minor material change in a fairly unprecedented way.

By: foosion

foosion — Tue, 09 Aug 2011 23:01:26 +0000

Reportedly, the last time there were three dissents was Nov 1992. LaWare, Jordan and Melzer

I saw it earlier on twitter, so no search needed