Monday, September 11, 2006

The Fed: Perfecting the Art of Confusion

Below are paraphrases of speeches by two members of the Federal Reserve, both of whom will be voting in the FOMC in the next few months. (See Yahoo/Reuters article.)

[Thanks to for the photo.]

First, Cathy Minehan of the Boston Fed.

Inflation up: "[T]he risks of both slower growth and higher inflation had increased in recent months."

Inflation down: "[S]he predicted softer growth would eventually bring down core inflation to more acceptable levels, saying that part of the recent spike in prices had been due to the passing on of energy price spikes."

And now Willliam Poole of the St. Louis Fed.

Inflation up: "Poole said inflation was running above the range he would prefer to see, and said that if it did not ease over the next 18 months that he would rather 'act earlier rather than later.' "

GDP soft: "this was 'not to say we couldn't have a weak quarter or two.' "

"The two officials' comments were sufficiently noncommittal with regards to the outlook for monetary policy that investors largely shrugged their shoulders."


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