The St. Louis Fed's Jim Bullard doesn't disappoint, arguing the FOMC needs more data before deciding whether to commence the QE taper.
Unemployment is down and payroll growth is generally strong, but other measures - labor force participation, employment to population, growth in hours worked - remain weak. Should the FOMC focus on NFP and UE or must a wider range of indicators be considered, he asks.
GDP growth has been pretty lame. Yes, the forecasts are optimistic, but Fed forecasts have been optimistic and wrong for years.
Then there's inflation - it remains below the 2% target and shows little sign of heading up to that level.
He suggests the start of the taper centers around the September meeting because a Bernanke press conference will follow, with no other press conference scheduled until December. By picking only certain FOMC meeting to follow up with a presser, the Fed has allowed to rise the perception that some meetings are more important than others and major policy decisions will only occur at certain meetings. All FOMC meetings should be ex ante identical, he argues (a press conference for each one - say it ain't so!).
The remarks gave only a temporary and small pop to stocks. The Dow (DIA -0.7%) remaining down more than 100 points.