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More on the Pause
Summary: The report that Fed chief Bernanke told Maria Bartiromo of CNBC that he had been misunderstood and that he wanted to communicate that the Fed might pause in its rate hikes and not that the Fed was necessarily done is entirely plausible. Bernanke also told Bartiromo that the data would dictate what the Fed might do in the future. This "explanation" of Bernanke's intentions are entirely consistent with our judgment of how the Fed sees its policy choices and inconsistent with the view being pushed by some people that the Fed is signaling that it is almost done.
The report that Fed chief Bernanke told Maria Bartiromo of CNBC that he had been misunderstood and that he wanted to communicate that the Fed might pause in its rate hikes and not that the Fed was necessarily done is entirely plausible. Bernanke also told Bartiromo that the data would dictate what the Fed might do in the future. This "explanation" of Bernanke's intentions are entirely consistent with our judgment of how the Fed sees its policy choices and inconsistent with the view being pushed by some people that the Fed is signaling that it is almost done.
Is the Fed almost done or not? That's the key question. Reading Bernanke's testimony suggests that the Fed is almost done moving policy towards neutral but it remains open to the possibility that more rate hikes will prove necessary, particularly if economic growth does not slow materially, as their internal...
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This section contains 429 words (approx. 2 pages at 300 words per page) |
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