From Bloomberg on the Fed:
Ever since they raised interest rates in December, U.S. central bankers have been caught in an uncomfortable place with their communication: They want to hike again, but they have taken a pass in four consecutive meetings this year. Fischer’s comments in an interview Friday on CNBC are “consistent with a Fed that would likely remain in a cautious, wait-and-see mode at the July meeting,” said Michael Hanson, senior global economist at Bank of America Corp. in New York.
Why would the Fed “want” to raise interest rates? It is their job to put rates at the right level, not to have some sort of subjective preference about what is really just a means to an end. Would you visit a doctor who “wanted” to do bypass surgery?
My bad. Metaphors prove nothing. But I think this qualifies as obvious, yet not widely accepted among the talkers. Markets are another matter.
Separately, the Fed and its sycophants describe too many issues as about “communication.” If you are wrong a lot, that is not a communication problem.
How do we “communicate” to the markets our plan to do something that is going to turn out not wise to have planned to do? Tricky, indeed.