The New York Fed’s latest quarterly report on household credit conditions is quite upbeat and somewhat at odds with the latest senior lending officers survey.
Especially interesting are the data on ‘transitions’, which show fewer new mortgages going bad, and some bad mortgages getting better.
It is early days but the Fed’s first press conference seems to have done its job: speeches by regional Fed presidents last week caused little market reaction after chairman Ben Bernanke set out a view for the FOMC on 27th April.
The sample is hardly big enough for statistical significance and recent economic data hardly supported the outspokenly hawkish views from the regional banks that often perturb markets.
But even if the press conferences do improve how the Fed communicates, and dampen the volatility of market responses, the real problem is what the Fed communicates. The Fed still does not communicate two things: (1) a clear numerical objective for policy; and (2) any idea of the monetary policy path it expects to use to get to its objective. Read more