So will the Federal Reserve raise rates again at its next meeting?
Perhaps. Probably not. But, again, it depends. I mean, Fed Chair Jerome Powell looked like he was sounding more lenient. Or maybe it was that the FOMC statement felt less aggressive. Correct? A little, no?
ambiguous message from Federal Open Market Committee meeting this weekWith a statement from the committee and comments from Powell that indicated monetary easing was far from certain, Disappointing for the markets, But it was par for the course in the modern art of central bank policy-making.
I see these moments in which the markets should analyze secret code Here are 12 of these people to find out what price to pay for financial assets, as a reminder that our economic survival hinges on the decisions of small groups of vulnerable humans. This is an interesting situation for the AI age in which we are surrounded by digital technologies that can review, interpret and program responses to massive amounts of data in seconds. Now, more than ever, we must demand greater clarity and transparency in policy-making.
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It all probably sounds like I’m a “rely on math“The argument for replacing our flawed human institutions with predictable, decentralized, censorship-resistant cryptographic monetary systems like bitcoin. But I truly believe that the sheer complexity of our global economy – different needs, political views, income, wealth and Debt is made of humans with scenarios – calling for some flexibility and uncertainty in policy making. A tight, deflationary monetary policy is not always the best thing; we need a human kill switch.
Nonetheless, given the repeated central banking failures of the last few troubled decades – not to mention all the mistakes made by our elected officials and regulators – shouldn’t we at least demand that our leaders act to guide us? Enable some of these new tools. Their and our verdict?
data and tools
The blockchain holds a wealth of valuable data that sheds light on human behavior. There are cryptographic verification systems such as store of evidence It can provide real-time confidence in the liquidity of banks and other important institutions. With hedge funds and other market heavyweights deploying powerful artificial intelligence tools to outperform all other market participants, policy makers will need powerful analytical tools of their own.
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Instead, officials are increasingly returning to opacity, deliberate ambiguity, and balance. When asked during Wednesday’s press conference whether he thinks monetary policy is too restrictive right now, Powell said, “It’s going to be an ongoing assessment. We’ll need data to accumulate on that.” That’s not an assessment that we’ve done.” – it would mean that we have reached that point. And I think it’s not possible to say with confidence right now.”
Forty two words. said nothing.
To be fair, the art of ambiguity is not a new practice among central bankers. The standard-bearer was Alan Greenspan, who held the powerful Fed chairman position for 19 years before exiting in 2006, two years before the global financial crisis brought his “new policies” to big banks, low rates and encouraging financial innovation. economy” had produced the ultimate legacy of the situation. Such credit default swaps: The financial crisis of 2008.
There is strategic logic to the esoteric approach. Central bankers seek to guide markets to the proper balance; They don’t want them to misinterpret their intentions and overreact in either direction. But there’s also some CYA going on: The less you can commit to taking a clear position, the less you can be blamed for being wrong when circumstances turn against you.
This trend towards opaqueness is not just for central bankers.
consider it now famous exchange Patrick McHenry (RN.C.), chairman of the House Financial Services Committee, and Gary Gensler, chairman of the Securities and Exchange Commission, during the latter’s appearance before the committee two weeks ago. McHenry repeatedly tried to provide Gensler with his opinion on whether ether is a security and reverted to the stock line drawn from the SEC Chair the howe test, Sensing, each time he tried, that Gensler was avoiding the question, McHenry would interrupt him and ask the question again, pointedly. The effect was to highlight the SEC’s lack of clarity on these issues, as a counterpoint to the chairman’s repeated assertions that “the law is clear” for crypto companies.
Gensler was between a rock and a hard place. Like Jerome Powell, he too had to defer because any kind of announcement would trigger a massive overreaction in crypto markets in either direction. But McHenry is still right: the crypto industry deserves more clarity from its regulators.
Read more: Securities vs Commodities: Why It Matters for Crypto
Part of what is happening is that Congress itself is unable to provide clarity. It cannot iron out its differences and legislate in a way that will set the right ground rules for the SEC, Commodities Futures Trade Commission and other agencies that regulate crypto.
In turn, it’s a function of how divided it is — how divided the US population really is. The result is the opposite of the empty word salad used by Powell and Gensler: We get very clear, candid, opposing statements from influential lawmakers on both sides of the political divide. The lack of clarity in this matter comes from their failure to come together, compromise and legislate. Just look at the debt ceiling impasse.
Regulators and policymakers like Gensler and Powell must operate in this fractured political climate, marked by the lowest trust ratings for government in history. Their own lack of clarity is a survival mechanism for coping with this pervasive uncertainty and malaise.
As I mentioned, there are tools in blockchain and crypto that can be helpful in cutting through the BS.
But alas, the US government is currently supporting that technology rather than eliminating it.
The views and opinions expressed here are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.