Summary
May 10 the Federal Reserve issued its official statement summarizing the Federal Open Market Committee's (FOMC) decision to raise the federal funds target rate another quarter point to 5 percent. The Fed said any further rate increases "will depend importantly on the evolution of the economic outlook as implied by incoming information."
Many media accounts interpreted the word "information" to mean economic statistics, not surprisingly. And it's certainly true that forthcoming statistics will help guide future interest rate decisions. But the Fed used the word "information" instead of "statistics" deliberately and for good reason. Information is much more than numerical data. It's also qualitative and anecdotal and an important supplement to statistics. It's the flesh that binds and reshapes the numerical data, and it's vital for monetary policy.See the full content of this document
Extract
Data Not Always What They Seem
In remarks before the Economic Club of New York on March 20, Fed Chairman Ben Bernanke spoke about economic information, saying monetary policymakers should monitor the relevan...
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