Wednesday, May 20, 2015

What Happens if The Fed Is A Follower Rather Than Leader?

While history has shown use that centralized management is an illusion that often implodes in panic of confidence lost, it's often trumped by good public relations. In general, the public believes the Fed, despite a highly interconnected global economy, controls everything through limited, domestic policies. What happens if the Fed, like us, follows rather than leads market forces? We'll see panic driven changes and policies once the economic cycle transitions from up to down.

Headline: What if data Fed is watching is not 'dependable'?

Federal Reserve policy makers have emphasized for many months that the timing of its first interest-rate boost in nine years will be “data dependent.” But what if the data are not as dependable as we thought?

This afternoon, the minutes from the Fed’s April meeting will be released, detailing the deliberations of the policy committee following a surprisingly weak first quarter and downbeat March employment report. This unexpected downshifting of first-quarter growth once again encouraged investors to push off the chances of a rate hike my mid-year.



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