Sunday, April 22, 2012

Is the Fed being clear?

The NY Times has a spurious article entitled "Aiming for Clarity, Fed Still Falls Short in Some Eyes" which states or implies that a lot of people think that the Federal Reserve is not communicating clearly, without pointing out the simple and obvious truth that the vast majority of people making that claim are probably simply critical of Fed policies in general or monetary policy in particular and simply lobbying for alternative policy approaches. These people know EXACTLY what the Fed means, they simply disagree with it and don't like it.
You can nit-pick over any statement in the English language and find some sort of purported ambiguity, but for a lot of these people to falsely claim that they don't know what the Fed means when they have more than enough context available for review is quite disingenuous.
In a lot of cases people are simply implying that the exact path of future Fed action is indeterminate, which is true since the Fed has made clear that they will adapt to economic conditions as they unfold, and even the Fed cannot predict the future so precisely. Unfortunately, there are a lot of gold bugs and so-called "Austrian" economists who misguidedly believe that if they had their way the economy would be predictable.
In short, the Fed is being quite clear, but a lot of people just don't like what they hear the Fed saying.


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