"It took the Fed three attempts after the March 20-21
Federal Open Market Committee meeting — the FOMC statement
issued the day of the meeting, congressional testimony by Fed
Chairman Ben S. Bernanke on March 28 and release of the minutes
on April 11 –before investors and traders finally understood
that an interest rate cut isn’t in the cards."
-John Berry, Fed Says What It Means — No Interest Rate Cut
The author notes how this misubnderstanding came about: "Somehow a lot of people got hung up on the words that were removed instead of paying attention to those that were there."
Of course, you didn’t have to go through all those gyrations. We told you in real time EXACTLY what the Fed was really thinking:
• Bernanke Testimony (short version)
• Bernanke on Globalization & Inflation (the Stanford speech)
The minutes make exceedingly clear that there was no move to a neutral position, despite what you may have heard from many spin-meisters. I wish CNBC and Bloomberg would invite all those Neutral NEUTRAL! screaming synchophants and ask them what the minutes mean now.
In their zeal to talk up their own books, they ignore inflation, and do a disservice to everyone else.
Fed Says What It Means — No Interest Rate Cut
Bloomberg, April 13, 2007