SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: mishedlo who wrote (3054)12/9/2003 4:28:59 PM
From: ild  Read Replies (3) of 110194
 
In So Many Words, The Fed Is Neutral Now For “A Considerable Period”
That’s my take on today’s FOMC announcement. According to Greenspan & Co., the upside and
downside risks to economic growth are “roughly equal” as are the upside and downside risks on
inflation. How long does the Fed anticipate being neutral? “[F]or a considerable period…” Why does
the Fed think that it can remain on the fence for a considerable period? Because core consumer
inflation is low and the Fed perceives that there is slack in resource use – i.e., low capacity
utilization and high unemployment. The Fed has effectively moved from a policy stance biased
toward ease to one of neutrality. Today’s announcement smacks of compromise. Greenspan got to
retain his phraseology “considerable period” but some of the more agnostic FOMC members got an
effective neutral statement. Has anything really changed? No. The Fed has not seriously considered
cutting the funds rate since the June FOMC meeting. And the Fed is not seriously considering raising
the funds rate through the March 2004 meeting. But the fixed-income markets did not care for the
statement upon reflection because neutral is just one step away from a rate hike.
northerntrust.com
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News