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Powell Press Conference Showed Why Fed Should Stop Talking
If you took anything away from the past 24 hours in markets, it should probably be that policymakers would do well to either say less or, my preference, say nothing at all.
Last month, in "If They’d Just Shut Up" I not-so-gently suggested that policymakers should... well, just shut up. Because they're not helping. To the extent everyday people are listening (they aren't), central banker rhetoric comes across as doublespeak, at best. At worst, it could easily be "mistaken" (note the scare quot
I don’t mind the more communicative Fed, as long as they keep it short and sweet and stick to the point. The worst part is watching Powell trying to explain things to a group of sometimes less than qualified reporters who are trying to elicit a response from the chairman that they can use to push a headline. Now that people are more hands-on with their investments, some additional color is helpful. Back in the “good old days” when all stocks had to be purchased through a broker (does anyone else here remember that?) the investor did not have to know exactly what every potential Fed move could mean, because you supposedly had a broker there to help decipher it for you. Even though the markets were much lower over-all back then, I do remember the old Fed sometimes surprising everyone and investors being caught totally wrong-footed as a result. That was not fun either. I was not investing myself back then, but wasn’t that in part how the “bond market crisis” in ’94 began?
I wish one of those intrepid reporters would ask Powell for a dot plot of members’ time spent reviewing policy versus the time spent on speaking engagements. Seems to me the latter has become unanchored.