The new Fed chair argued that the Fed should stop reflecting markets back at themselves. Forgotten debates show how this leads to confusing, indeterminate results.
Really good post. I was also skeptical of the task forces, as the 'problems' they are meant to address don't feel like something meant for a task force, but continuous research.
We will see who he nominates, but I find it slightly concerning.
I'm not a fan of dot plots. Historically, the Fed can predict everything except future FFR, at which they are horrible. Nevertheless, not providing forward guidance is the luxury of a stable market. In a crisis, the Fed will need to calm the market with reassuring guidance on what they're going to do. This new communication tactic will end with the next crisis.
I wonder if there isn't another reason for not explaining or predicting what you're doing. Because his actions will have no good explanation. It is the behavior of an emperor, not a public servant.
Agree. I was wondering if the silence was part of keeping the White House at bay, but his answer on that question made me think this is more personal for him. For them to get the independence that they have, they do need to be extra accountable for what they are doing with it.
Really good post. I was also skeptical of the task forces, as the 'problems' they are meant to address don't feel like something meant for a task force, but continuous research.
We will see who he nominates, but I find it slightly concerning.
I'm not a fan of dot plots. Historically, the Fed can predict everything except future FFR, at which they are horrible. Nevertheless, not providing forward guidance is the luxury of a stable market. In a crisis, the Fed will need to calm the market with reassuring guidance on what they're going to do. This new communication tactic will end with the next crisis.
I wonder if there isn't another reason for not explaining or predicting what you're doing. Because his actions will have no good explanation. It is the behavior of an emperor, not a public servant.
Agree. I was wondering if the silence was part of keeping the White House at bay, but his answer on that question made me think this is more personal for him. For them to get the independence that they have, they do need to be extra accountable for what they are doing with it.
Gee whiz! I can't imagine where you can find the economist you describe in your closing ....
It's like a summoning spell, or putting a PK-signal in the sky like Batman.
Indeed! I’ll have to check whether he responds.