Remember when the Fed was inscrutable, and nobody knew what the heck our central bankers were thinking? Well, not anymore.
Had it started and ended with Warsh going off the reservation two weeks ago, then it might be an anomaly.
But that was followed by Richard “speed and intensity” Fisher (speech), Charles “Great Inflation” Plosser (speech), Jeffrey “show stopper” Lacker, and Thomas “sooner rather than later” Hoenig (speech).
This appears to be a deliberate attempt to introduce uncertainty into the market about the future course of monetary policy.
If this is true, it’s really smart. They say the market hates uncertainty, but it would be worse if the Fed were transparent and easily out-guessed. And since the Fed is engaged in all kinds of trading (mortgages, etc.), it’s particularly important that the Fed keep traders guessing.
Or maybe they all really disagree about where the Fed should go?
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