The only thing that
was significant or potentially
significant about this interest rate hike was the
removal of the word accommodative by the
Federal Reserve in their official statement to
describe the current state of monetary
conditions or monetary policy.
Now, I
initially thought that was a
significant removal of a word obviously
the Federal Reserve thinks very
carefully about the written statements
and so if they chose to remove a word
that was there and they know that people
parsed through these words with a
microscope and so the fact that the word
was missing and obviously it's missing
by intention it wasn't just an accident
that they're trying to send a message
and what I first thought the message was
and I still believe that was the Federal
Reserve views a two percent interest
rate as neither accommodative or restrictive but maybe neutral. The
Federal Reserve now believes that interest rates are high
enough that they would no longer be
described as accommodative.
