The New Two-Handed Monetary Policy Indicator
We've discovered a new--but immediately old--monetary policy indicator.
The economy, financial markets, and monetary policy have come upon difficult times. The credit crisis that began erupting around midyear 2007 was followed by slowing economic growth, rising unemployment, and increasingly trying times for earnings for a wide variety of companies, especially in financial services.
I was writing a recent economic update and reading the latest available Federal Open Market Committee meeting minutes to try and get a grip on things when I noticed something interesting: There seemed to be a lot of "howevers" in there. Then it struck me that perhaps it wasn't that odd to see so many "howevers" in the minutes lately, given the heightened stress policy makers are likely experiencing.