What The FOMC Has To Keep Repeating Matters, Not What It Changes

by Jeffrey P. Snider
Alhambra Partners

As usual, everyone is focused on the wrong part of the FOMC statement. There is already a lot being made about the one sentence inserted as “hawkish” sentiment that puts the economy, supposedly, back on its fruitful, “full employment” track. In a clear sigh of relief undoubtedly in relation to the scary May payroll report, the July 2016 FOMC statement confidently announces:

Near-term risks to the economic outlook have diminished.

Why anyone would give it any weight at all is a mystery. The FOMC has been making the same declaration intermittently for almost two years; only to have to retract it as “global turmoil” randomly, in their view, intrudes.

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