Fed scrutinsed and not meeting critics expectations - BNP

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Apr 3, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    After the March FOMC meeting, there have been mounting critics of
    the Fed policy.

    Key Quotes:

    "The Fed was accused of time inconsistency, or to put it differently, to have changed its reaction function without warning.

    Last week, James Bullard, the St Louis Fed President, had already addressed the critic 2, claiming the Fed had not been time inconsistent in March.

    Janet Yellen addressed the critics that the Fed’s communication is blurred. In essence she said:

    You say our communication sucks. I say it works fine: data-dependency is recognised enough by financial markets that they do adjust in realtime to data releases, “resulting in movements in bond yields that act to buffer the economy from shocks. This mechanism serves as an important “automatic stabilizer” for the economy”.
    For more information, read our latest forex news.

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