Thread by @mckonomy

You're not gonna like this post, #Fed pundits.
I've seen a lot of arguments the Fed is misleading investors, doing a terrible job of communicating, and that @NewYorkFed President Williams contradicted @federalreserve Chair Jay Powell on rate cuts.
You're wrong.
1/7

Traders and analysts are reacting to what they thought they heard. But they did not listen. 2/7

Powell said rate cuts were not a focus of discussion. Williams said that rate cuts were not a focus of discussion. They both characterized the meeting the exact same way.
3/7

But did rate cuts come up? Yes, both said. But both said only when some individual members of the Open Market Committee presented their SEP forecasts and mentioned the topic. 4/7

There's no contradiction there. Same explanation.
Additional points: Fed officials aren't sent out to "mop up" comments from the Chair. The interviews are scheduled well in advance*. And for Powell & other FOMC members, their comments are a function of what they are asked. 5/7

Bottom line: the Fed has shifted to a peak rate regime. That raises the question of rate cuts. They had to make forecasts and some said 3 in 2024, up from 2 in September. They presented those forecasts. That was the sum of the discussion, say BOTH Powell and Williams. 6/7

You can criticize policy. But listen to what they actually say, not what you think you heard.

*Except for when the Chair wants to send markets a message through the WSJ Fed reporter. 7/7