An Essentially Unchanged Statement

January 26, 2011

Even fewer changes were made to the January FOMC statement than had been introduced to the prior statement of December 14th.  A modest upgrade had seemed plausible in the characterization of economic activity, but such wasn’t to be.  One inconsequential modification was to substitute “improvement in labor market conditions” for “bring down unemployment” in the sentence that said recovery is continuing but not strongly enough to affect the labor market as much as officials seek.  Another addition was to point out the rise in commodity prices but to add that this development had not affected inflation expectations or halted the downtrend in core inflation.

Unlike the vote in December, today’s was unanimous, but the statement gives no hint that such resulted from shifting member views on the committee.  Rather it was a function of the rotation of four members from non-voting to voting status and four others from voting status last year to non-voting status this year.  Out are Hoenig, Bullard, Pianalto, and Rosengren; in are Plosser, Fisher, Kocherlakota and Evans.  In 2010, Tom Hoenig dissented in favor of a more hawkish stand at all eight meetings.  Plosser and Fisher tend to be anti-inflationary in predisposition, but neither adopted Hoenig’s maverick role.  Rosengren, who was a voting member in 2010, tends to be one of the more dovish FOMC members in the rhetorical words he chooses to use in public.

The next FOMC meeting is scheduled for March 15th.  Beware the Ides of March.

Copyright Larry Greenberg 2011.  All rights reserved.  No secondary distribution without express permission.



Comments are closed.