A recent article on ZeroHedge suggests that the Federal Reserve may be “just winging it:”
“Are the central bankers at the Federal Reserve just winging it?
“It sure seems that way if you step back and take a long view of their decision-making.
“Fed officials project this aura of authority. You might imagine them as hyper-intelligent experts in the field of economics and finance making carefully calculated monetary policy decisions based on a thorough understanding of all the dynamics in the economy. After all, they must have risen to these important positions at the Fed based on their economic acumen, right?
“Or maybe they are just politicians making stuff up as they go along.
“A more accurate word picture would probably be a bunch of people wearing expensive suits throwing darts at a dartboard.
“Current Fed Thinking
“We just got the minutes from the most recent FOMC meeting held on April 30 and May 1. As you may recall, the committee elected to hold rates steady at 5.25 to 5.5 percent. But the messaging that came out of that meeting was relatively hawkish after several previous CPI reports showed stubbornly sticky price inflation.
“In its official statement, the Committee conceded that rates will remain at this level into the foreseeable future.
“’The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.’
“During the post-meeting press conference, Powell admitted that he and his fellow central bankers don’t have a clue when that might happen.
“’I would say my personal forecast is that we will begin to see further progress on inflation this year. I don’t know that it will be enough, sufficient. I don’t know that it won’t. We’re going to have to let the data lead us on that.’
“The May meeting minutes reveal that the FOMC members were even more hawkish behind closed doors.”
To read the full article on ZeroHedge, click HERE.