I have to agree with Frederic Mishkin of the Fed:
I think there is too much focus on what decision will be made about the federal funds rate target at the next FOMC meeting. What is important for pricing most financial assets is the path of monetary policy, not the particular action taken at a single meeting.
One of the great myths of the market is the over-agency of the Federal Reserve. In reality, the Fed is much less powerful than is commonly believed.
I think some people have to believe that there's some mysterious group that's in charge and running things. Ron Paul even blames the Fed for higher oil prices.
Nobel Laureate, Edward Prescott, wrote in the Wall Street Journal:
I am not saying that there are no real costs to inflation -- there certainly are. And if we get too much inflation we can exact high costs on an economy (witness Argentina as an example). However, I am talking here of the vast majority of industrialized countries who live in a low-inflation regime and who are in no danger of slipping into hyperinflation. It is simply impossible to make a grave mistake when we're talking about movements of 25 basis points.
