On the March FOMC
A dovish surprise after months of hawkish talk from Fischer, who has taken the lead-spokesman role from Yellen. Today’s statement more frankly acknowledged global risks, and all the “dots” came down. At the same time the statement contained laughably wrong claims about the health of the economy, and again failed to state a balance of risks. We think the Fed is recovering from an institutional mania for “normalization” that set in last year. It will take a while for its rhetoric to catch up, but we continue to think that there will be no more rate hikes this year.