I have seen all Fed reserve meetings for the past 5 years- Today’s meeting was VERY different
Everytime Fed Powell had these meetings, he would give specifics and details. These specifics would help people understand how the economy works.
The questions he would answer ( from the journalists) had clean logic and the main approach he had- highly DATA DEPENDENT approach to increasing/decreasing rates and other decisions the Fed took. A straight numbers guy( which also means there is no ‘left’ and ‘right’ politics here)
And honestly it made sense. I mean the economy has been pretty good even though there have been multiple shocks just in the past 6 years( since covid) - aka- his data dependence strategy worked. powell did an absolutely amazing job( personally)
Warsh on the other hand- the entire press conference- was very ‘political’ in his answers.(when i say Political statements on this post- i am referring to answering in very ‘political’ way- non committal, not republican/democrat kind)
Even to the questions that was pretty straightforward- can you explain what do the numbers/hike mean for the general public? - went on a rant about ‘maintaining price stability blah blah’
Not a single answer was convincing. He couldnt even answer the basic question of what will be the effect of the hikes on mom/pop stores
He constantly kept reiterating - he is NOT data dependent- he is ‘Trend dependent’
When I heard that- and i was like- Did he just Gaslight us all?
Multiple data points indicate a trend- so how are you saying you are NOT data dependent?a trend is literally a longer observation of a specific data - like cpi etc
He was asked what data were they looking at to make the decision- and again his answer was ‘ not data dependent on any one kpi/metric, but trends’ again i am like- did i just become dumber? Because that does not make any sense
He kept repeating ‘ look outside the window and see the reality’ again and again- to questions that really dont have any relation to that
He was asked about the Forecast - which is 2% inflation target( when is that going to be reached?) and the forecast is for 2029( its currently around 3.7% yoy)
This forecast was made by his 18 colleagues.
He outright kept saying ‘ i dont do forecasts, i dont do guidance’ and that forecast opinion was not ‘mine’ Sounded like he put them all under the bus there.
The entire meeting was extremely Wishy Washy- and all i wanted to hear were some numbers, decision criteria, data used to determine the decisions( and why) and what changed from the last time to this time.( just 6 months ago he was criticizing powell that he is driving the economy towards a slow down- and rates should be decreased)
Someone asked him ‘you said this 6 months ago, can you let us know what data convinced you that a hike is needed rather than a cut.- nope. He was just repeating the same talking points without clearly saying it.
Like Powell would literally say ‘ we assumed something- and it was wrong so we corrected it’( meaning Walsh could have just been humble- its ok- its the nature of the job- math has no emotion)
All straight forward answers
Every. Single. Answer felt like a political speech.
just give the numbers and lets all make our own decisions.
Numbers dont lie.numbers have no narrative or emotion- and its the BEST AND ONLY measurement of reality.
This was the first time- the numbers were hidden/unclear.
And the approach was ‘we saw some specifics that forced us to hike- but you cant get it’
This is very different
If the fed reserve isnt just blunt- straight forward, non political and be data driven ( like Powell was) then it erodes the public trust. This is one of the most important( if not the most important) institutions of the country.
If the narrative of this fed is ‘ hide the numbers/data’ but give political statements ( kept saying stable price action- which is just another way of saying- yes inflation is high- we have stabilize the prices) to simple answers.
It just felt like we are being kept in the dark- kind of meeting.( or i am very used to the extreme detail, and numbers/data driven guy like Powell-so maybe my expectations are high?)
Personally that is a RED FLAG.
This post is NOT a political perspective, i couldn’t care less when it comes to Fed reserve/Economic meetings. i am a numbers guy so just give me that. And i didnt get that today- and thats all that matters.
The Chairman of the Fed Reserve is a market mover. His words matter and affect how stocks and bonds ( and the $) perform- all links to our day to day purchases and expenses.
So VERY relevant to this sub too.
We are in a new territory( atleast thats what it looked like in his 1st meeting, maybe this will change- but time will tell)