Fed's Blather as Expected, No Hikes Through 2023

Today the Fed released statements following a two-day meeting. There were lots of statement changes but no surprises.

Fed Signals Interest Rates to Stay Near Zero Through 2023

The WSJ reports Fed Signals Interest Rates to Stay Near Zero Through 2023.

Yep and not a soul is surprised.

The Wall Street Journal's Statement Tracker shows changes since the last meeting.

Statement Tracker Changes

(Click on image to enlarge)

Dissents

Robert S. Kaplan believes it is "appropriate to maintain the current target range until the Committee is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals as articulated in its new policy strategy statement, but prefers that the Committee retain greater policy rate flexibility beyond that point"
Neel Kashkari wants "the Committee to indicate that it expects to maintain the current target range until core inflation has reached 2 percent on a sustained basis".

Commitment to Bubbles

The Fed commits to holding inflation above 2% for some time to make up for errors in the other direction.

This too was expected but it's rather like smashing your right hand with a hammer because you did not smash your left hand hard enough.

Why 2% and not 1% or 4%.

The Fed has never explained. Besides, there is no net benefit to inflation but there are winners and losers.

The winners are those with first access to money, the banks, and the wealthy. The losers are everyone else.

This implies the target should be 0%, assuming there should be a target at all.

But there shouldn't be a target because there shouldn't be a Fed.

Tweets of the Day

#Powell dancing around financial stability questions as usual. Says #Fed should do "macro-pru-ish" things (my shorthand) instead of adjusting QE or rate policy. Same as always.
— Mike Larson (@RealMikeLarson) September 16, 2020

'How we think about the tools, is what our boys need us to buy - the stuff they get paid to own' -PE Powell pic.twitter.com/HyMWq95zb9
— Keith McCullough (@KeithMcCullough) September 16, 2020

Chair Powell says Fed will use full range of "tools" - which include some FOMC members 🤓 pic.twitter.com/5nFjKDNrYs
— Viraj Patel (@VPatelFX) September 16, 2020

Stupidity Still Well Anchored

Today's statement confirm The Fed's Stupidity is Still Well Anchored.