The Fed holds the keys to the global economy, and must choose its words more carefully. Its large, rapid rate hikes have made financial markets fragile. Words matter.
1) People are confused identifying official Fed Res information sources, due to the ambiguous nature of the 1913 Fed Res Act’s characterization of the independent Federal Reserve System of Banks vis-a-vis The Board of Governors of the Fed Res. One arguably straddles between Private and Public, the other is squarely a Quasi-Governmental Agency, with all the mandates that this implies. The Quasi-Agency Board of Governor’s Chairman clearly has fiduciary duty to American and its affiliates, I do not know if that includes Non-Bank Presidents, Board of Gov’s vice-chairs such as Brainard.
2) The information that leaves the Fed Reserve, via its Banks, or Board of Governors has ‘Left the Building’, if you will, and its too late to get involved with Market Forces that this information may ignite.
———
More generally, the organizational problem of handling periodic, dynamic, sensitive information dumps & flows, by The Board of Governors, that we know will be leveraged as triggers to actions by millions of people, driving trillion’s of dollars of investment & policy decisions across the international community per year—one would think, that there would be a well thought-out, refined, monitored process, that clears up such ambiguity, and considers the risk-level implications of potentially unintended information leaks; opportunities for information misinterpretation/misuse in the media; and an assortment of inequitable information cul-de-sacs that may form.
To my knowledge, there is no broad robust security/confidentiality policy in the Quasi-Agency Space(I may be wrong), which dictates and constrains how relevant/sensitive information must be handled in the course of the operation of the US Government (and Quasi-Governmental Agencies like the Board of Governors of the US Federal Reserve Banking System) in 2022.
Beyond the Quasi-organization, such types of information handling issues have been of concern in the news in recent years while having come to the attention of officials in several areas of the US Government (The WH, the Supreme Court, & who knows how many other incidences that we are just not aware of). The American way of just “winging it” may no longer be working for us, in this day of increasing technological sophistication.
At IBM, a Company who’s enduring mandala/moniker “THINK”, since 1914, implied a basis for many branches of its management style over the years through the 20th century and is still relevant today: 1) The value of IBM’s Intellectual Property Assets, normally invested-in & developed within the firm, were key to its future technological competitive advantages; 2) A security system of controls for Supplier/Customer/Internal-Use documents, development-products/technologies, and tool-modeling plans/process handling, that were graduated by established ‘needs to know’ protocols, multilevel management reviews, and in parallel, an employee/contractor education program as part of employee’s individual Professional Development coursework.
Roughly speaking, such communicated “asset” security planning & protocols need to be sewn into every sensitive area of the US Government today in order to protect The People’s future assets and security/safety. Eg, In any one given Speech(or Tweet), The US Presidency has been leaking(indirectly/directly) information, at the very least, of our ‘intent’(and much more) for 6 yrs now. The dam has holes, and the dam is ready to go.
Summary: Claudia’s concern with The Federal Reserve Bank’s management of ‘outsider’ financial expectations is at least as important a part of the day-to-day business that any other agency of the government handles during the year.
The especially concerning information-messaging by the Fed Reserve that some have observed during these high inflationary times, I believe, is stemming from a much broader problem which includes the integration of super-timely, high-speed/high-volume & quality, rapid-message-proliferation technologies, driven by a set of advancing tech-tools that are clearly well beyond the capacity of our antiquated traditional managerial communication paths to handle safely/effectively while attempting to preserve the security of “mis-intended consequences” of original sources/sinks of our most vital information flows today.
It seems to me that any speculation of what future instrument settings will be are inappropriate. Changes in Instrument setting are supposed to be based on data. I'd rather hear the Chairman say how the partial derivative of a target variable wrt to an instrument variable has changed in their revised estimate.
And of course to ask the Treasury to please crated some intermediate tenor TIIPS.
I had heard something about how Jerome Powell has a mindset where he wants his image and reputation as a Fed Chair to be great. That obviously doesn't bode well for markets in the short term as that means he will likely let rates go too far before not far enough. He'd rather push the economy way over into recession vs aiming for a soft landing at this point for an image.
First, a couple of thoughts:
1) People are confused identifying official Fed Res information sources, due to the ambiguous nature of the 1913 Fed Res Act’s characterization of the independent Federal Reserve System of Banks vis-a-vis The Board of Governors of the Fed Res. One arguably straddles between Private and Public, the other is squarely a Quasi-Governmental Agency, with all the mandates that this implies. The Quasi-Agency Board of Governor’s Chairman clearly has fiduciary duty to American and its affiliates, I do not know if that includes Non-Bank Presidents, Board of Gov’s vice-chairs such as Brainard.
2) The information that leaves the Fed Reserve, via its Banks, or Board of Governors has ‘Left the Building’, if you will, and its too late to get involved with Market Forces that this information may ignite.
———
More generally, the organizational problem of handling periodic, dynamic, sensitive information dumps & flows, by The Board of Governors, that we know will be leveraged as triggers to actions by millions of people, driving trillion’s of dollars of investment & policy decisions across the international community per year—one would think, that there would be a well thought-out, refined, monitored process, that clears up such ambiguity, and considers the risk-level implications of potentially unintended information leaks; opportunities for information misinterpretation/misuse in the media; and an assortment of inequitable information cul-de-sacs that may form.
To my knowledge, there is no broad robust security/confidentiality policy in the Quasi-Agency Space(I may be wrong), which dictates and constrains how relevant/sensitive information must be handled in the course of the operation of the US Government (and Quasi-Governmental Agencies like the Board of Governors of the US Federal Reserve Banking System) in 2022.
Beyond the Quasi-organization, such types of information handling issues have been of concern in the news in recent years while having come to the attention of officials in several areas of the US Government (The WH, the Supreme Court, & who knows how many other incidences that we are just not aware of). The American way of just “winging it” may no longer be working for us, in this day of increasing technological sophistication.
At IBM, a Company who’s enduring mandala/moniker “THINK”, since 1914, implied a basis for many branches of its management style over the years through the 20th century and is still relevant today: 1) The value of IBM’s Intellectual Property Assets, normally invested-in & developed within the firm, were key to its future technological competitive advantages; 2) A security system of controls for Supplier/Customer/Internal-Use documents, development-products/technologies, and tool-modeling plans/process handling, that were graduated by established ‘needs to know’ protocols, multilevel management reviews, and in parallel, an employee/contractor education program as part of employee’s individual Professional Development coursework.
Roughly speaking, such communicated “asset” security planning & protocols need to be sewn into every sensitive area of the US Government today in order to protect The People’s future assets and security/safety. Eg, In any one given Speech(or Tweet), The US Presidency has been leaking(indirectly/directly) information, at the very least, of our ‘intent’(and much more) for 6 yrs now. The dam has holes, and the dam is ready to go.
Summary: Claudia’s concern with The Federal Reserve Bank’s management of ‘outsider’ financial expectations is at least as important a part of the day-to-day business that any other agency of the government handles during the year.
The especially concerning information-messaging by the Fed Reserve that some have observed during these high inflationary times, I believe, is stemming from a much broader problem which includes the integration of super-timely, high-speed/high-volume & quality, rapid-message-proliferation technologies, driven by a set of advancing tech-tools that are clearly well beyond the capacity of our antiquated traditional managerial communication paths to handle safely/effectively while attempting to preserve the security of “mis-intended consequences” of original sources/sinks of our most vital information flows today.
Signed - Joe Citizen X
It seems to me that any speculation of what future instrument settings will be are inappropriate. Changes in Instrument setting are supposed to be based on data. I'd rather hear the Chairman say how the partial derivative of a target variable wrt to an instrument variable has changed in their revised estimate.
And of course to ask the Treasury to please crated some intermediate tenor TIIPS.
I had heard something about how Jerome Powell has a mindset where he wants his image and reputation as a Fed Chair to be great. That obviously doesn't bode well for markets in the short term as that means he will likely let rates go too far before not far enough. He'd rather push the economy way over into recession vs aiming for a soft landing at this point for an image.