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He Hates These Dots
Jerome Powell spoke Monday at a NABE conference in Nashville, where he said a whole bunch of nothing.
I hope readers will forgive the drab assessment. The problem -- one problem, there are plenty -- with incessant Fed communications is that in the absence of material events between policy gatherings, there's only so much to say above and beyond what's communicated in the FOMC statements, projections and dot plot.
As I complained Monday on social media -- where I wouldn't be if I cared as much
“If the Fed isn’t enamored with the market’s dot plot obsession, they could just stop publishing the damn thing.”
Oh my dear god, NO! American hedge funds and other speculators need those dots. In fact, they should be updated weekly, not eliminated. Let’s help keep our hedge funds great!!!
Building upon that patriotic imperative, it is incumbent upon the Fed (and everyone else) to help support and further nurture the finance industries. A glance at a table like this shows just how wrong-headed Trump & Biden/Harris have been when focussing their energy on shoring up US manufacturing.
Industry Share of GDP
Finance, insurance, real estate, rental, and leasing 20.7%
Professional and business services 13%
Government 11.4%
Manufacturing 10.3% (only HALF of finance)
Those comments made me smile… 🙂
“die rate cutter!”
Dot fatigue aside, I do like Powell trying to brush back some of the “50 in November” expectation.
I could not agree more on the dots. Powell once said at his press conference something to the effect that past 3 months the dots did not provide much meaningful guidance. They are way past their sell by date. The post meeting press conferences with q&a on the other hand are useful. I would suggest making them 4x per year, except if policy changes.
I mean, it’s a challenge.
Sure, you’re data dependent and every meeting is potentially live but, otoh, if you’re purely reactive and have no idea where the economy will go beyond the next month… isn’t that problematic for an institution meant to guide macro? (I wanted to use the verb ‘cornaquer’, which is guiding (a person, a group) but originally guiding elephants – the image of the economy as a ponderous elephant you do your best to drive but hey it’s not easy and you may not be very agile felt right. No idea how to get that image in one word in English).
I’m surprised no one asked about the longshoreman strike. Given an extended strike that has potential to create more “supply chain issues” and drive up inflation again.
By the way, thanks for confirming that my choice to completely avoid social media is the correct one.
Is the title of this piece a reference to “The Jerk”?
Of course.