The Fed: Boring Is Great

The Federal Open Market Committee just hiked its federal funds rate target another 75 basis points (bps; 100 bps equal 1.00%), to a range between 3.00% and 3.25%. Hiking rates aggressively is risky when housing is already struggling and when what the Federal Reserve (Fed) does today might not be fully felt for dozens of months into the future.

Fed Preview: Talk Isn’t Cheap

The old saying is that “talk is cheap.” It certainly isn’t if you’re a central banker. Investors hang on a central banker’s every word. Whether the Federal Reserve (Fed) hikes by 75 basis points (bps; 100 bps equal 1.00%) or 50 bps is probably less relevant than what Fed officials say with their Summary of Economic Projections (their guesses about what they’ll do in the future and how the economy may evolve).

The Fed and the markets—a game of chicken.

Federal Reserve (Fed) Chair Jerome Powell gave a short and sweet speech at the Jackson Hole Economic Symposium on August 25, but the market took it as being brief and bitter. Since then, the Institute for Supply Management released its manufacturing and services indexes. Manufacturing activity has moderated, and services activity has been shockingly strong.