Fed Governors Ought To Talk Less
Especially when they have nothing to say
Today Fed Governor Michelle Bowman said that the Fed will lower its Fed Funds rate when more progress is made toward the Fed’s 2% target and that she is open to raising the Fed Funds rate if progress “stalls” or “reverses”. Please tell us something we do not know or refrain from speaking.
When I came into the business then Fed Chairman Alan Greenspan and his Governors did not speak to the media every week or more frequently as seems to be the case today. They simply executed Fed policy and when they spoke they had something to say beyond where they thought they would take the Fed Funds rate over the next year or two. I find the Fed’s “dot plot” insufferable.
I would love Fed officials to speak about what they believe are the long-term upward and downward pressures of inflation. What are the pressures on corporate profit margins? Speak about advanced automation / artificial intelligence. Speak about population trends. Speak about mass migration to the U.S. and its open border policy. Speak about the unsustainable fiscal policies of recent years and their upward pressure on inflation, particularly in the absence of demand for U.S. Treasuries on behalf of sovereign funds which forces Fed participation in Treasury auctions (and therefore forces the Fed to print).
We need Fed Governors with banking backgrounds, with technology backgrounds, with operating executive backgrounds, not lawyers like Ms. Bowman and PE execs like Chairman Powell.