In economic news today, the Fed let out a big yawn. YAWWWN... Go ahead, you know you want to.
As it is every time the Fed meets to determine whether to raise or lower rates, this was the big economic news of the day. Of course, Fed watchers a plenty are ready to let us know what is going to happen before it happens. Normally, I would use this portion of the blog to make fun of such prognostications, but it turns out the Fed watchers actually have a good record. Perhaps it is easier to know what the humans are going to decide than it is to know how it will all play out.
An odd example, after the college basketball season there is no shortage of sports "analysts" who tell us who will be in the NCAA tournament and which teams will get the coveted #1 seed. Now, they're picking 65 teams, not guessing whether the Fed will do thumbs up, down or sideways, but all things considered they're pretty accurate. Try having those same guys fill out their brackets with the same accuracy. Won't happen. They have a good idea of how the committee will act, but they have no clue as to how it will all play out.
I loved that headline. "Fed Holds Rate Steady." Of course, being the big economic story of the day, there were headlines galore:
"Central Bank Trains Focus on Inflation" -CBS Marketwatch
How awful is that one? It fails to tell you what happened (Fed left rates unchanged), it's not very Googleable, and it certainly doesn't flow off the tongue very well.
"Fed Leaves Rates Unchanged" -CNN Money
Now, you see this is close to the winner, "Fed Holds Rate Steady", which, by the way, was on the Investment News web site. But there's a subtle difference. "Fed Leaves Rates Unchanged" sounds very passive. Like they looked at it talked about moving it, but in the end just walked away. "Fed Holds Rate Steady" has such an active implication. I can just picture Bernanke and the crew of stodgy old bankers from the Wamu commercials. You know...
I can just picture these guys with Bernanke in the middle of it all holding up this huge shiny percent sign. Holding steady!
Even more amusing is the first line of the article, "The Federal Reserve Board held the economy's key interest rate at 2% today in a bid to keep inflation in check."
I hope those old Wamu banker guys also have the ability to hold gas prices in check, because let's be honest about what is causing inflation.
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