The Fed is so constrained that monetary has been reduced to floating rumours about wording changes to the FT:
In March, the Fed went a step further and said the committee “anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period”.
Ever since, the US central bank has stuck with the “extended period” phrase – indicating policymakers see little likelihood that interest rates will rise over a time frame that has never been defined, but some see as at least six months.
But now senior officials are starting to mull changing the statement in a way that would soften this guidance. That would be a natural step in the slow glide- path towards eventual policy normalisation.
This is for real. This FT report is being cited for an overnight dollar rally all because senior officials are mulling a word change at some point probably far into the future. Remember when central bankers actually raised or cut rates?