The Think Tank: Macro Discussion and Opportunities Brainstorming

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Just came across this, which could be significant for tomorrow:

https://twitter.com/NickTimiraos/status/1551883267523182592

The implications are: the Fed could stop providing forward guidance.

Nick is the WSJ journalist who the Fed used to “leak” the impending 75bps rate hike last time around. This time, he’s talking about the Fed no longer providing forward guidance. I suppose it makes sense at some level - with loss of credibility, not many are taking Fed guidance or chatter as seriously as they would like. Yet, it still matters, so economic signals are perhaps not being incorporated into the markets as quickly because of expectations from the dot plot and such. (Associated WSJ piece.)

Removal of forward guidance would be disconcerting to markets though, and could significantly add to volatility. This piece by NIck came out today morning, so could explain the market’s reaction, though perhaps folks are looking at the Fed confirming it tomorrow, if at all.

Note that the ECB recently did the same thing, and pointed to forward guidance as a constraint:
https://twitter.com/elerianm/status/1550825265118547970

Have to think through the implications of this.

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