As expected, the Fed kept the FFR% at 2% today at its FOMC
meet. No surprise there, and no surprise on the more hawkish
talk about inflation (See 6/16 post).
Looking at the long history of the Fed's decisions regarding the
FFR%, this latest pronounciamento puts them about where they
should be, and maybe 25 bp. to the low side.
A current favorite among the pundits is that the Fed is "between
a rock and a hard place" or "caught in a box". The news here is
that the Fed is always between a rock and a hard place, since it is
charged with fostering full employment economic growth and riding
herd on inflation.
So, It is on now to incoming data. This being a national election year,
the Fed is going to be keen to see whether the current round of tax
rebates can spark an economic rebound over the summer.
- Peter Richardson
- Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!