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Thursday, February 07, 2008

Tim Duy: Policy Confusion

Tim Duy with an update on market participants uncertainty over the Fed's next move:

Policy Confusion, by Tim Duy: A picture says a thousand words. From the Cleveland Fed today:

Ratecutprobs

Expectations for the March FOMC meeting are all over the board, with a growing proportion of market participants expecting a full 100bp between now and then, presumably with 50bp in the form of an intermeeting cut. Not unexpected given last week’s slide in equities, as, whether true or not, the general feeing is that the Fed is actively targeting stock markets.

Either investors are uncertain about the path of economic activity, or they are uncertain of the Fed’s policy objectives. Most likely a combination of both. One thing is for sure – if the Fed had any intention of reigning in expectations for additional easing, they are once again falling behind the curve.

    Posted by on Thursday, February 7, 2008 at 10:52 AM in Economics, Fed Watch, Monetary Policy | Permalink  TrackBack (0)  Comments (2)

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