Use access key #2 to skip to page content.

ikkyu2 (99.52)

The dissenting member

Recs

22

November 01, 2010 – Comments (3)

I have been an ardent Fed watcher since 1981, when I opened my first passbook savings account ( 15% interest! )

Lately - the Bernanke era - I have noticed that there is usually a dissenting member quoted in the FOMC minutes.  The dissenting member's identity varies - briefly Yellin - Lacker did a nice turn - now Hoenig.

This is hard to quantify, but I have come to feel that as the dissenting member's comments and outside speeches become more strident, that they tend to telegraph the FOMC's eventual actions with about a 6-9 month lead - far longer and far more precise than any other leading indicator I'm aware of for predicting the actions of these Masters of the Universe.

I feel - and yes, this is just a hunch, I got nothin for you data hounds - that Hoenig, bless him, has pretty well hit that key level of stridency in the last couple weeks.  So I'm calling for Fed Funds 0.50%+ sometime between May 1 and Sep 1, 2011.

3 Comments – Post Your Own

#1) On November 01, 2010 at 3:37 AM, BillyTG (32.97) wrote:

+1 interesting

The only one I've read about recently is Richard Fisher (and I think he's a non-voting member).  He sounded a little dissenting in October.

This should be a very interesting week.  Something tells me the Fed hasn't even made a final decision...that they have multiple courses of action ready to go based on the elections and market reactions in the next couple days.

Raising the rate probably won't help the housing situation much will it?

Report this comment
#2) On November 01, 2010 at 5:49 AM, MegaEurope (22.68) wrote:

I think QE2 discussion is a good indication that rate increases in the next year are totally off the table.

Report this comment
#3) On November 01, 2010 at 11:29 AM, ikkyu2 (99.52) wrote:

I am of the opinion that QE2 discussion is the main purpose of the QE2.  I don't think any meaningful stimulus will actually occur.  Bernanke has been pretty clear that manipulation of sentiment is part of his policy toolbox.

Report this comment

Featured Broker Partners


Advertisement