Am I happy about the FOMC now? No way. No how. This was a Fed that promised to be more open and transparent. They thought by cutting down on "Greespeak" that transparency would increase. Wrong. Now we have Bernanke madness.
If the FOMC knew they were going to take this morning's action when they released their announcement yesterday then why did they not say so at that time? There are two responses to that. First, the FOMC is not transparent and its inability to communicate is a huge flaw. Second and more worrisome is that they had no intention of taking this morning's action yesterday afternoon. That would mean that they realized the errors of their ways after the fact and then had to react to the market's afternoon Bronx Cheer that the FOMC received. Neither of those responses gives me confidence in or a feeling of renewed transparency from the FOMC. I would speculate that the idea of the global intervention may not have been that of our Fed. We have to wonder if Jean-Claude Trichet called up Bernanke and alerted him to the errors of his way
This will go down as the Volatility Fed not the Transparent Fed. The market hates volatility and hence will hate this Fed. This Fed is so poor at communicating that I suggest it hires its own public relations firm and communications staff. We have the FOMC and other Fed members making speeches and then acting in complete contradiction to those speeches. If the FOMC wants more transparency then why do we have to wait 3 weeks for the FOMC meeting minutes? We have the technology - after all we are the USA for crying out loud.
