Today the Federal Reserve released the minutes from its last meeting, and as usual the Fed didn’t normalize interest rates and unwind its balance sheet. Which at this point 8 years later is really about the only thing of relevance they could actually say.
Personally I’m a bit skeptical about how genuinely the Fed is really looking out for the interests of the people rather than those of the banks. But that aside, there are other reasons to not need be in a rush to act based on their latest commentary.
Let’s assume even for a moment that the system is actually designed to make life better for people. Even if the Fed is trying to do the right thing, how much faith can you have in their ability to execute that?
After all we’re approaching year 9 of low interest rates and the economy still is so fragile that all the Fed can do is talk about raising rates. Or talk about selling off all of the debt it purchased that nobody else would.
And if their untested strategy over the past decade was so surefire to work, how come they can’t even agree about it, at least according to The Wall Street Journal?
“Fed officials have been publicly airing their disagreement over the proper course of interest rates since the meeting.”
The Fed also continued to talk about unwinding its massive balance sheet.
“The minutes also indicated that officials were confident their plans to slowly reduce their $4.5 trillion portfolio would run smoothly without disrupting markets.”
If that’s really true I’d sure like to know how. Because if they’re going to sell those bonds, who’s going to buy them?
Keep in mind everything that was reported today has been getting reported for years.
So before you make any decisions based on today’s Fed minutes, remember that the commentary might best be taken with a large grain of salt.