The Federal Open Market Committee last week raised interest rates by another three-quarters of a percentage point. Federal Reserve Chairman Jerome Powell then delivered an hourlong market-moving press conference, replete with argle-bargle about neutral and terminal rates, meeting-by-meeting adjustments, narrow landing zones and much more. The average viewer was left with the impression of a momentous event for the economy, while having very little idea of what actually happened.
Don’t feel bad about that last bit, dear reader, since it’s not obvious the Fed knows what’s going on either. In a very real sense the Fed has lost control of those areas it ought to manage, while constantly trying to expand its role into those areas it ought not to manage.