International Development News
Development News Edition

Fed's grades slip in Wall Street's latest report card

Wall Street last month gave the Federal Reserve its worst grade since Jerome Powell took the helm of the U.S. central bank earlier this year, docking points for a communications misstep early in October that sent U.S. stocks tumbling.

The report card is included in the New York Fed's survey of primary dealers that each quarter elicits an assessment of the Fed's communication with markets and the public over the prior six to eight weeks, using a scale of zero, for "ineffective," to five, for "effective."

The Fed received an average score of 3.57 in the latest survey, conducted October 25 to 29 and released on Friday. That's down from 3.87 in mid-July, the last time the Fed was graded on its communication prowess. The first grade of Powell's tenure, in April, was 3.82.

The downgrade is at least partly attributable to Powell's remark on Oct. 3 that interest rates were probably a "long way" from neutral, which seemed to contradict his comment a couple of months earlier rejecting a too-rigid reliance on the neutral rate to shape policy because it could lead to costly mistakes. Stocks plummeted in response.

"Several dealers noted that recent communication from Fed officials has been clear. However, several dealers noted that they perceived recent communication regarding the neutral policy rate and its role in informing monetary policy as being unclear or at times inconsistent with prior Fed communication," the survey said in the comments section.

Also that month, President Donald Trump called the Fed "crazy."

This month, Powell and other Fed policymakers have tried to dispel any perception of hawkishness. Markets have rallied this week after Powell signaled he'd be open to taking a go-slow approach on rate hikes.

Still, the Fed under Powell is so far scoring higher than it did when Powell's predecessor Janet Yellen was in charge.

In October 2015, when the Yellen Fed was navigating the difficult transition from years of super-low interest rates to a cycle of rate hikes, she got the worst grade of her tenure -- an average 2.27 out of 5.

Will Powell be able to earn enough extra credit with Wall Street to boost his grade?

Stay tuned until February, the next time the report will be released. (Reporting by Ann Saphir Editing by Sonya Hepinstall)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)



How music can help expectant mothers during pregnancy

Music provides pleasant ambience for all but its more important for expectant mothers as besides ensuring pleasant environment for them it also directly and indirectly influences the unborn babies. There are various scientific findings to c...

EdTech: A technical approach to flexible and cost-effective education

Its hight time for the world to go for innovative approaches like e-learning over traditional learning methods that need physical infrastructure, long-term planning, and huge investment. ...

Our school campaigns are our strongest ally: Joaquin Antuna, founder of Peace and Cooperation

Joaquin Antuna is the founder of Peace and Cooperation, a Spanish NGO which was nominated as peace messenger by the United Nations in 1986. Antuna is of very firm opinion that in order to have an incisive impact on the community we live in,...

'No escape from telephones', this 1953 prediction actually comes true

In 1953, a telephone company chief predicted that therell be no escape from telephones in the future....


Latest News

UPDATE 1-Visiting Thailand, Pope condemns exploitation of women and children

Pope Francis on Thursday condemned the exploitation of women and children in Thailand, which is notorious for its sex tourism, calling the violence, abuse and enslavement they suffer evils that must be uprooted. Francis started his first fu...

Tuvalu rejects China offer to build islands and retains ties with Taiwan

Tuvalus foreign minister said on Thursday the South Pacific nation had rejected offers from Chinese companies to build artificial islands to help it cope with rising sea levels, an approach viewed as undermining Taiwans influence in the reg...

India Women claim 5-0 T20 series sweep over West Indies

The Indian womens cricket team completed a 5-0 series whitewash over the West Indies after half centuries from Veda Krishnamurthy and Jemimah Rodrigues, complemented by the bowlers clinical show, steered the side to a 61-run triumph in the ...

D/N Test is win-win only when standard of cricket isn't compromised: Tendulkar

Sachin Tendulkar is all for the buzz and eyeballs that Indias first ever DayNight Test has generated but at the same time would like the stakeholders to ensure that quality of cricket is not compromised at any level. India are the last amon...

Give Feedback