The U.S. Fed is clearly still trending towards providing less clarity to the market, but on Wednesday it finally let the \”patient\” penny drop, opening the door wider for a rate hike yet still time assuring everyone it won’t do so until it it’s certain the U.S. economy is on track.
U.S. Federal Reserve ends pledge to be \’patient,\’ opens door to June rate hike
But the Fed signaled a more cautious outlook for U.S. economic growth and slashed its projected interest rate path, inside a sign it remains concerned about the health of the recovery
\”Just because we removed the word patient from the statement does not mean we are going to be impatient,\” Fed Chair Janet Yellen said inside a press conference in Washington.
Now, one of the toughest yet most significant challenges for business leaders is deciding how they will make decisions.
There are numerous ways to do this, but it generally comes down to two. On the one hand, you might have a strong and compelling long-term vision, develop a strategy to make it happen, rally your troops (as well as your investors) to the cause, after which weather whatever storms get in your way.
On the other hand, you are able to resist what George H.W. Bush despondently called \”the vision thing,\” and just make decisions according to your ongoing assessment of current and future conditions, and finding the best way forward because of the environment.
Especially in turbulent times, the latter might seem the greater commendable approach because it\’s the more prudent one. But it\’s also the more difficult path, because your decisions can end up looking temporary, dithering, even cowardly.
It is yet another downright painful experience for employees and investors to watch a leader apparently shifting with the breeze. And god assist you to if you make a mistake.
Maybe central bankers aren’t business leaders, but their decision-making process is similar – and much more curious nowadays – and they\’re at least leaders whose decisions get this amazing impact on business.
The trend for central bankers lately is to adopt a \”data-driven\” approach – that is, making decisions according to an assessment of (often short-term) business conditions, rather than sticking to a consistent long-term approach or predictable program that\’s easily communicated towards the markets.
Now, this might be a prudent and rational response to changing conditions, but it drives markets nuts, partly because it makes central bank statements more indecipherable while simultaneously making deciphering their statements more important.