analysing Fed statements is always a game of monetary Kremlinology, as participants look for minor word changes to detect slight shifts in what Bernanke’s thinking.
Today was different. The text of the statement was really vanilla, offering up no new policies, nor novel commentary on the economy.
Instead, the interesting action was in the very last paragraph:
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action was Charles L. Evans, who supported additional policy accommodation at this time.
That dissent from Charles Evans was the key, and might explain why the markets haven’t sold off at all. If everyone else agrees, and one person votes dovish, then it means that to some extent the ground has shifted in favour of more easing, even if the text doesn’t actually go there.
It should be noted that Evans has been the favourite among leftist monetary policy fans for a while now. See Mike Konczal here.