Wednesday, April 13, 2005


Greenspeak: No One Knows What He Means, and That's The Whole Idea

Today's WSJ has this line: "...the Federal Reserve expects to raise interest rates higher than it previously believed necessary and possibly at a faster pace...",,SB111332811394904803,00.html?mod=home%5Fwhats%5Fnews%5Fus

Today's NY Times has this line: " still stuck with language in its post-meeting statement that future rate increases could be at a pace 'that is likely to be measured.'''

Ummmm.... yeah.... Just another reminder that the Fed tries to stay out of the marketplace as best it can, and it's up to us as executives and investors to interpret the tea leaves on our own. One reporter looks at it one way, and other,... well, you know. Good job, Mr. G. As Harry Truman said "I want a one-armed economist so that the guy could never make a statement and then say 'on the other hand..." Unless of course, that economist is in charge of the Fed.

I still think we're headed for a quarter point every time they meet.

For a great view of the economy, the Dallas Fed updates its PDF slide show every Tuesday afternoon. Slide 32 shows the real Federal funds rate, and shows there's plenty of room for the Fed to keep raising rates. When the business press reports things, it often lacks perspective, so looking at the data in its fullness illuminates the data to be something quite the opposite of what was reported.

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