I get the FOMC meeting minutes and other push e-mail from the Federal Reserve. For many months now, I’ve wondered what the FOMC is thinking. The meeting minutes are “All heck is breaking lose here or there, but have you seen my new PalmPilot?” At the Sept. 18 meeting, the federal funds target rate was reduced to 4.75. Upon reading the meeting minutes and those of the past dozen or so meetings, one must wonder…What’s going on over there? Does the Emperor have any clothes? It was decided by the Fed some time ago that food and energy costs would not be a factor in inflation (uh, i.e., in factoring “real” inflation). Food and energy had become cheap, relative to total household expenses, since the 1970s, so it made sense at one time. Yet, these are not as cheap now, and food prices are now more greatly affected by energy costs (ethanol manufucturer). Attached is a file containing the Sept. 18 FOMC meeting minutes. The commentary is much more in line with lay observations of U.S. markets, yet are the FOMC members in this world?
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