Wednesday, May 09, 2007

The Art of Saying Nothing

The FOMC (Federal Open Market Committee, the group of economists and ex-bankers who think they control the US economy and employment) issued its periodic statement today.

[Thanks to for the photo. Like the FOMC, this fellow gets to talk out of both sides of his mouth.]

All market operatives were 99% sure the Fed would not change the target interest rate from its present 5.25%, and they were right.

But what readers were really interested in is the language surrounding that announcement. Would the Committee continue to maintain their "hawkish anti-inflationary stance?" Or would they hint at a possible future loosening of the monetary faucet?

What we got was a still-life study in the nature of "Neutral." They have painted out of this statement any phrase, word or punctuation that might give a clue as to what they intend to do in the future.

They might as well have written:

"As you all know, there's nothing in the data to force us to touch the interests rates. And all you people who are looking for an excuse to blow off some steam, don't bother yourselves attempting to read anything into the wording of this statement because you'll just be wasting your time."

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