Jerome Powell’s Ad-Libs Don’t Help

In everyday life, if you inadvertently cause confusion with something you say, it makes sense to try to correct the situation. That goes for professional settings and interpersonal relationships too. But it doesn't necessarily apply to central bank communications. As a central banker, the more you talk, the higher the chances of traders misinterpreting something you say and enshrining that misinterpretation into market pricing. That's why it's better to i) not talk or, in the era where you hav

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One thought on “Jerome Powell’s Ad-Libs Don’t Help

  1. I wonder if these Powellisms have the effect of increasing rates via higher real risk premium. Or are they neutral to rates and only affect Fed credibility?

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