The Fed chief seems to prefer outsourcing monetary policy to financial markets. That's a bad idea.
· livemint.com
By not explaining the logic of how the US Federal Reserve adjusts policy in response to changes in the American economy, the Fed ends up ceding control to financial markets. This would constrain the efficacy of its policy as it goes along. Here’s how.
Second, financial markets price by what they expect the Fed will do, not what it should do. So, when the central bank is silent about how it is interpreting inc...