Moments ago, St. Louis Fed president James Bullard gave one of his signature yellow-backgrounded presentations to the Tennessee Bankers Association Annual Meeting taking place at the favorited by 1%-ers everywhere Breakers hotel in Palm Beach, Florida. The bulk of his presentation is the usual trite platitudes, but he did have some chose comments, such as:
- BULLARD: FED SHOULDN'T BE `INTERVENING' ALL THE TIME IN MARKETS
So just intervene from 9:30 am to 4:00 pm in the US equity market? But what will those who have been screaming about rigged, manipulated, broken US equity markets rail about if the Fed isn't intervening all the time in "markets", and if some semblance of normalcy, even if highly crashy, returns?
Rhetorical questions aside, next we got this:
- BULLARD: DOLLAR LOOKING GOOD AS RESERVE CURRENCY NEAR TERM
- BULLARD: YUAN MAY EVENTUALLY POSE CHALLENGE AS RESERVE CURRENCY
Or, if you are a Russian company, "eventually" took place about 1 month ago.
In short, the Fed: always one step ahead of the curve.
Continuing, here is how the Fed measures, as in actually measures, the distance from the proverbial goal posts:
This formula, while idiotic, is notable because as Bullard shows, the Fed has now overshot in its rush to the Fed's "goals":
And shorter:
[9]
And as Bullard explains:
- Another way to look at this data is to ask: How often has the FOMC been as far from its objectives as it is today?
- The answer is about 75 percent of the time.
- That is, if we do this calculation for every month of data since 1960, 75 percent of the time the FOMC was in a worse position with respect to its goals than it is today
In short, fun with greek letters and stuff.
His full presentation: