The Fed Is Putting the Powell Put In Its Place
There’s a pattern to the things the central bank decided not to mention. Also, investors are overreacting to Mexico’s president-elect.
The Fed wants markets to know it won’t get fooled again.
Photographer: Bradley Kanaris/Getty Images AsiaPacTo get John Authers' newsletter delivered to your inbox, sign up here.
The Federal Reserve concluded an interest-rate setting meeting Thursday. It announced no changes to monetary policy. And by my count, it only changed nine words in its official statement from the one it issued after its meeting in late September when it raised interest rates. The Fed noted that the unemployment rate had “declined,” whereas six weeks earlier it “stayed low.” Also, business fixed investment has now “moderated from its rapid pace earlier in the year.” To present either of these changes as a signal of changing intentions by the Fed would be pushing things too far.