A Little Volatility Might Be Just What the Fed Needs
\n\n“When someone shows you who they are, believe them the first time,” the poet Maya Angelou is said to have famously observed.
\n\nAngelou might not have been thinking about monetary policy when she uttered those words. But they might matter when it comes to thinking about Kevin Warsh’s tenure at the Federal Reserve. A corollary of Angelou’s advice is that if you want to be believed, you need to show someone who you are.
\n\nWarsh has said he wants to change the way the market and investors react to information about the economy and the words of Fed officials. In particular, he wants less focus on the words of Fed officials and more on the economy. That’s who he says he is. But he has not yet shown us who he is.
\n\nThis matters because Wall Street has become awfully certain that the Federal Reserve won’t raise interest rates Wednesday. According to CME’s FedWatch, investors are putting the probability of a quarter-point hike at around 10 to 15 percent.
\n\nThe economic case for another hike is straightforward. Inflation is still running well above the Fed’s target and has been gaining…
Original source: https://www.breitbart.com/economy/
