One of the reasons the Fed decision is notable this week is because of how little officials have said in the run-up to the decision.
A few policymakers have made comments in the past month but none of the notable ‘core’ members.
- Fed’s Bullard wants to “get going” with rate increases
- Williams: Drop in market-based US inflation expectations does not reflect state of US
- Fed’s Plosser: Policy should return to normal footing now that economy has
- Fed’s Lacker: Central bank should drop reference to being ‘patient’ if hike warranted
- Fed’s Lockhart would prefer a later liftoff date if data mixed
- Fed’s Evans: Jobs growth has very good for quite a long time
Add that all up and there isn’t much to go on. The takeaway might be that if Yellen was thinking about removing ‘patient’ she would have tried to make a comment or sent out Fischer or Dudley to send a signal. Instead, she may be deliberately trying to let the data do the talking and so far it hasn’t said enough.
There is some talk, however, that the Fed could scale back hawkish expectations. The OIS market certainly sees a larger chance of a sidelined Fed — it’s pricing only about a a 15% chance of a hike in June, down from upwards of 30% in December.
