Do we really need to pay attention to the constant chatter from the Fed, who seemingly knows less about the future than anyone?  The committee is of course made up of the smartest minds in banking/finance, backed up by tremendous research departments.  The leadership of the entire body has been trusted for generations to do the ‘right thing’ at the right moments, so trust is a two-way street.

However, the quandary of the past several years has caused many to lighten up on their belief in the Fed as policy directives in the media by committee members have been more frequent.  Not to say these representatives are alarmists, but clearly the public dissects every word spoken in an address or statement to help decipher a potential ‘code’ which may reveal a clue about policy.

Fact is, the Fed is uncomfortable with low rates but they cannot change the condition we are in, which is a low growth, low inflationary environment.  As former Fed Chair Ben Bernanke once said, ‘Fed policy is not a panacea’, hence they cannot wave a magic wand to get their desired effect. 

Are they just looking at the data?  Most definitely, but also fighting the urge of making the wrong move at the wrong time, which we likely saw in December 2015 with that first rate hike.  How did the markets/economy respond to that hike, which was premature at best (inflation not even near 2%)? 

A whopping 1% GDP for the first half of 2016, which by all accounts could have been much better without the unnecessary rate hike – which was done for show rather than purpose.  The consequences were felt, let’s hope they don’t make the same mistake again by raising rates before it is necessary.