With the U.S. central bank hitting cleanup these are some scared central bankers who spend much of their time now whistling past the economic global boneyard. Otherwise called jawboning. In eight years the Fed hiked interest rates once, a measly 25 basis points, and the market immediately went all jelly-legged. So what did these fearless economists, who love to tell anyone foolish enough to listen how all things economic are, do? They backed off.
All three of these central banks are in a quandary. They showed up at a gun battle with a handful of paring knives thinking they'd seen this scrum before and knew exactly what to do. But after a just few hard punches and a couple of mean elbows got thrown, they decided to pack it in, paralyzed inmates trapped in their self-inflicted cells.
We have discussed the downfalls of data driven decision making in the past. One of the central characteristics of this Fed is not just being data-driven but being driven by just the right data. In the wrongs hands it leads to analysis and paralysis. Or gelling with Yellen. Here are two quotes to make the point.
"The start of the new month does not mean a new trend. The technical tone of the dollar is weak," Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York, said in a note to clients.
"The Federal Reserve acknowledges the continued improvement in the labor market. The problem is that it has not translated to stronger consumption, and business investment remains soft," Chandler said. "Fed officials need more confidence that the six-month economic soft patch has ended."
On Friday this week, non-farm payrolls for April are expected to show a rise of 200,000.
On a recent CNBC's "Futures Now," Lindsey Group chief market analyst Peter Boockvar made the case that the Fed will never get the "perfect" conditions they seek before increasing short-term rates once again.
The Fed's mandate "isn't to have a perfect world. That only exists in fairy tales, dreams and in your econometric models," Boockvar said in a recent note to clients. He believes that the Fed's monetary has been far too accommodative under Yellen as well as under Ben Bernanke.
Boockvar argued that the Fed has been taking cues from shaky international banks, and that doing so will always offer a reason to keep interest rates low.
In Wednesday's statement, the strategist noted new suggestions that the Fed is shifting its focus to concerns over international development. In its March statement, the Fed said that "global economic and financial developments continue to post risks," a line that does not appear in the more recent language.
"It's been excuse, after excuse, after excuse," Boockvar said. "This is why, eight years into an expansion, they've only raised interest rates once. They're afraid of their own shadow. They're in a terrible hole that they're not going to be able to get out of."
Whether looking at the Fed, the Bank of Japan, or the European Central Bank, Boockvar sees a landscape littered with policy errors.
"They all believe that, by making money cheaper, you can somehow generate faster growth," Boockvar said.
Based on this, Boockvar said that central bankers are losing their credibility and their ability to generate higher asset prices, putting the stock market in a precarious position.
"In a world that's already choking on too much debt, the cost of money really isn't an important variable and it is not a binding constraint on anybody's decision making."
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