Forex Flash: Is market stability an issue in aftermath of FOMC? – UBS

It is fair to say that the FOMC has not seen so much debate over policy in quite some time – “although forward policy was supposed to have been resolved as an issue with the December launch of numerical targets, in hindsight the decision appears to have been somewhat rushed, and right now individual members are at odds over exact policy calibration.” suggests Research Analyst Garth Berry at UBS.

Be that as it may, perhaps the market should still take a step back for commending the Fed to have such a debate in the first place, without any risk of jeopardizing market stability. “Even right now, such open debate in other policy boards would be far more difficult; especially as economic agents (not market participants) strongly rely on certainty to generate rational expectations.” Berry warns.