Funny but scary true translation of the Fed's statements!
Fed; Well, when an economy is operating at the so-called zero lower bound, it creates a situation where there are asymmetric risks. It is possible if the economy proves stronger than is expected to respond to that by tightening policy. If there are adverse shocks to demand that tend to push inflation and economic performance in an adverse direction it's not possible to lower rates.
Translation: We know things kind of suck around the world, and aren't all sunshine and roses here at home. But we have to raise rates so that when our economy tanks again we can lower rates and look like we’re doing something useful.
Fed; In some corporate debt markets, we do see evidence of unusually low spreads.
Translation: I don’t know what idiots are buying high yield debt at 5%, but they’re going to get smoked when we start raising rates!
Fed; The global experience shows that giving central banks independence to make monetary policy decisions that they think are in the best interest of the country and consistent with their mandates leads to lower inflation and more stable macroeconomic outcomes.
Translation: The central banks are doing great! Except for when we've fueled speculative bubbles and almost ruined the global financial system, but let’s not talk about that. We need more power, not less, so thanks for giving us sole oversight of the new Consumer Finance Protection Board.
Fed; I, you know, I think I need to be ready to answer questions on any aspect of Federal Reserve behavior, and that's an important principle.
Translation: Me worried about testifying to Congress? Are you kidding? I’m appointed for six years, report to no one, and am considered to be the most influential financial figure in the world. I don’t wait for appropriated money for my budget, I print it! Bring ‘em on.
" A rich man is not the one with the most! He is the one that needs the least!"
