Roseman: The fiscal cliff and equity double-speak

ROSEMAN

According to the Minutes of the FOMC meeting on 12 December 2012: "To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens.

“In particular, the Committee decided to keep the target range for the federal funds rate at 0%-0.25% and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6.5%, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2% longer-run goal, and longer-term inflation expectations continue to be well anchored.” With an unemployment rate target of 6.5%, there is now a visible and obvious economic variable against which the ...