Thursday, October 18, 2007

Pianalto Provides No Clues

Sandra Pianalto, President of the Cleveland Fed, gave a brief speech today on "National and Regional Economic Conditions." Pianalto is not currently a FOMC voter, and she tends to stick to local issues rather than broad macro themes, so she doesn't usually provide much insight into FOMC thinking. She made only one brief mention of policy:

Since our September 18 meeting, the housing sector has remained very weak, but output and employment in other sectors appear to be holding up. Inflation and inflation expectations continue to be moderate and anchored. The strains in financial markets that were so evident and worrisome in mid-September appear to have lessened somewhat. During the past few weeks, as market participants have gained a better understanding of their financial positions and the positions of others, financial markets have become more stable. The Federal Open Market Committee meets again on October 30th and 31st, and we will once more assess developments and act as needed to foster price stability and maximum sustainable economic growth.
That unfortunately tells us exactly nothing about the likely course of monetary policy.

Pianalto will have an FOMC vote starting in January 2008. In the two previous years when she had an FOMC vote (2004 and 2006), she did give more policy-focused speeches, so hopefully we'll get more policy insight from her next year.

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