Poole Skipped Fed's Conference to Maintain Secrecy (Update1)
By Anthony Massucci
Aug. 17 (Bloomberg) -- William Poole, president of the Federal Reserve Bank of St. Louis, kept dinner plans last night to avoid tipping the Fed's hand.
In a surprise announcement in Washington, the Fed today cut the discount rate it charges banks for loans by half a percentage point to 5.75 percent, after a 6 p.m. teleconference late yesterday. Poole, in Arkansas for a speech, skipped the Federal Open Market Committee call to have a meal as scheduled at the University of Arkansas at Little Rock.
``He didn't want to run the risk that it looked like the FOMC was holding an unscheduled meeting,'' St. Louis Fed spokesman Joseph Elstner said in a telephone interview. ``He thought it was more important to stick to his schedule.''
Richard Fisher, president of the Dallas Fed and Poole's alternate on the FOMC, stood in for Poole on the call.
Poole dined with Jane Wayland, interim dean of the university's college of business, a half dozen professors and about 25 students. Cancelling the dinner plans ``could have led to speculation in the press about'' the FOMC meeting, said Elstner, who is traveling with Poole.
Poole, a voting member this year of the FOMC, was not available for comment.
The meeting occurred a day after Poole told Bloomberg News there's no sign that the subprime-mortgage rout is harming the broader U.S. economy. Only a ``calamity'' in markets would require the Fed to convene and cut rates before its next scheduled meeting Sept. 18, he said in the interview.
Today, the FOMC acknowledged for the first time that ``market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward.''
2001 Comments
On April 10, 2001, Poole spoke about an inter-meeting rate cut as a possibility, while saying quick action wasn't necessary. ``Most of the time, in most circumstances, I think it makes sense to move at the regular meetings,'' he said at the time.
Eight days later the Fed cut rates by half a percentage point after an unscheduled meeting.
Two weeks ago Poole was singled out for ``shame'' by Jim Cramer, a CNBC television host who called Fed officials ``nuts'' for leaving interest rates unchanged as global credit was under siege. Cramer's rant came after Poole said July 31 that a 4.9 percent drop in stocks a week earlier was ``typical market upset.''
``Bill Poole has no idea what it's like out there,'' Cramer yelled in a segment that drew more than 1.6 million hits on YouTube, the video-sharing Web site.
Poole, 70, plans to retire from the central bank next year. He is a former economics professor at Brown University in Providence, Rhode Island, and joined the St. Louis Fed as its president in 1998. The St. Louis Fed includes Arkansas and portions of Missouri, Mississippi, Tennessee, Kentucky, Indiana and Illinois.
To contact the reporter on this story: Anthony Massucci in New York at amassucc@bloomberg.net ;
Last Updated: August 17, 2007 14:57 EDT
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