Well, this isn’t a good sign…
Philadelphia Federal Reserve President Charles Plosser (one of the more hawkish members of the central bank) says they were all a bit surprised by the market reaction to last week’s comments by Fed Chair Janet Yellen that moved up the timetable for the start of interest rate hikes to as soon as next spring, rather than next summer or fall.
There was a lot of evidence and a lot of surveys that suggest six months wasn’t a wildly unexpected timeframe. But it is better to get away from talking about timeframes. Talking about economic conditions is a much better way to think about it. I was surprised the market reacted as much as it did.
Wow. With things as dicey as they could be with the Fed attempting to extricate itself from the greatest monetary policy experiment in human history and with the central bank making it up as it goes regarding what “economic conditions” it’s looking at (i.e., the fallen jobless rate target), Plosser thinks saying something that “wasn’t wildly unexpected” is just fine.