Five Things You Need to Know

Wednesday, December 13, 2006 | 02:30 PM

My favorite part of Minyanville is Kevin Depew's Five Things You Need to Know.

His take on yesterday's Fed meeting is a perfect example why 5 Things has become a daily read for me:


Fed Got a Brand New Bag

The Federal Reserve Open Market Committee met yesterday and decided to keep its target for the federal funds rate unchanged at 5.25%. 

    • The decision to stand pat on the fed funds target rat was widely expected, so the only drama surrounded the release of the FOMC statement. 

    • Two things stand out.  The first is the progression of the Fed's view of the housing market. 

    • Housing first made an appearance in the FOMC statement accompanying the May 10 meeting: "The Committee sees growth as likely to moderate to a more sustainable pace, partly reflecting a gradual cooling of the housing market..."

    • The Fed's view that the housing market was "gradually cooling" apparently remained in place until the Sep. 20 meeting when the accompanying statement said: "The moderation in economic growth appears to be continuing, partly reflecting a cooling of the housing market."

    • Now, the FOMC statement notes the following:   "Economic growth has slowed over the course of the year, partly reflecting a substantial cooling of the housing market."

    • In the course of seven months the housing market has gone from gradual cooling to cooling to substantial cooling. 

    • The second thing to stand out is the addition of the word "mixed" to describe the economy. "Although recent indicators have been mixed, the economy seems likely to expand at a moderate pace on balance over coming quarters."

    • Looks like the Fed got a brand new bag... and it's mixed.

Great stuff kevin -- Thanks!


Fed Got a Brand New Bag
Kevin Depew
Five Things You Need to Know:
Minyanville Dec 13, 2006 10:31 am

Wednesday, December 13, 2006 | 02:30 PM | Permalink | Comments (11) | TrackBack (0) add to | digg digg this! | technorati add to technorati | email email this post



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"Economic growth has imploded over the course of the year, reflecting a chaotic implosion of the housing market, the credit market, the consumer, and YO MAMA."

The Federal Reserve Open Market Committee

December 15, 2007

Posted by: ECONOMISTA NON GRATA | Dec 13, 2006 3:25:49 PM

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