Some People Are Uncomfortable With
Living In The Moment Data Dependency
“Yellen took the April meeting off the table for the first rate increase, but insisted that a June liftoff was a very real possibility, and that no June liftoff was also a very real possibility.” Meanwhile, “twelve of 16 U.S. primary dealers that do business directly with the Fed said on Wednesday they see a rate liftoff in September or later. Just four of those responding to a Reuters poll stuck with June as their forecast…‘It was primarily the downward shift in their outlook on growth and inflation’…Policy makers lowered their median view of U.S. growth for 2015 to 2.3 to 2.7 percent, from an outlook in December of 2.6 to 3.0 percent, while reducing their outlook on core inflation for this year to 1.3 to 1.4 percent, from 1.5 to 1.8 percent three months earlier.” Meanwhile, David Merkel plots FOMC members’ projections for inflation, fed funds and GDP over time, and expects “the FOMC to continue to err on the side of monetary lenience.” “Yellen’s response to a question about standard formulas or mechanical rules for monetary policy illustrated that her responses were not intended to be evasive, but rather to emphasize the complexity and uncertainty inherent in the economy, and that simple rules, while useful for thinking about how the theoretical economy functions in the long run, are impractical for conducting monetary policy in the real economy in real time.” Also, “you cannot understand life and its mysteries as long as you try to grasp it. Indeed, you cannot grasp it, just as you cannot walk off with a river in a bucket. If you try to capture running water in a bucket, it is clear that you do not understand it and that you will always be disappointed, for in the bucket the water does not run.” Meanwhile, it’s Markets 1 Fed 0 you guys.