Exiting Fed Member Expects Some Turbulence With Less Direct Communication

The Federal Reserve should expect more “bumps in the road” as financial markets react to increasingly less precise communications from the U.S. central bank, a top Fed policymaker said on Tuesday.

In a speech, Fed Governor Jeremy Stein recalled last year’s abrupt run-up in market-wide borrowing costs and warned that even the most deliberate communications from the central bank cannot prevent such reactions as the time to tighten monetary policy approaches.

“As policy eventually normalizes, guidance will necessarily take a different form; it will be both more qualitative as well as less deterministic,” said Stein, who leaves the Fed later this month.

via SOURCE

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza