jump to navigation

The game Yellen and FOMC play September 19, 2015

Posted by hslu in Economics.
Tags: , , ,
trackback

I bet that you don’t know this. I‘ll let you in on a big secret here.

After Yellen took over American’s top banker job from Bernanke, she came up with a new game for FOMC bankers to play when they meet in Washington DC every time they meet.

They play with dots. Seriously, they take turn to throw dart on a piece of paper and come up with the so-called “Dot Plot.”

Take a look what they came up with three months ago in June 2015.

Slide5

 

Last Wednesday and then Thursday, they, under the supreme leadership of Yellen, diligently played the same “dart” game again behind the heavily guarded metal doors of the Federal Reserve’s building near the Capitol. And here is what they came up with: more dots.

Slide4

My conclusion: these people, just like the rest of us mortals, have no idea of what U.S. economy will be like next quarter or, for that matter, any quarter of any given year. They are, shall I say, playing with dots in the dark.

But, do not for any nano second, underestimate the importance of these dots because the decision they come up with based on these dots will have huge influences on the bond markets, stock markets, currencies and commodity prices all over the world. Some countries may sink into recession. Some countries may see inflation out of control. Some countries will experience significant down-turn on their economies. Above all, many people in many countries will suffer, probably for a long time after Yellen and company wrap up their dot plots.

 

Advertisements

Comments»

No comments yet — be the first.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: