By Nell Henderson
Washington Post Staff Writer
Friday, May 12, 2006
Oops, they did it again.
Federal Reserve officials bumped up interest rates again Wednesday and signaled that more hikes may be in store, breaking the hearts of bond traders who had longed for a sign that the central bank had finished tightening credit.
Instead, many investors and analysts found themselves scratching their heads over what Fed officials meant in their typically cryptic, jargon-laden post-policymaking-meeting statement.
"Some further policy firming may yet be needed," Fed policymakers said in their statement.
"Policy firming"? Huh? Who talks like that?
So much for former Fed vice chairman Alan S. Blinder's recent prediction that the Fed's new chairman, Ben S. Bernanke, would quickly lead the central bank to "adopt English as its official language," in contrast to predecessor Alan Greenspan's peculiar and sometimes intentionally baffling locution.
Ardent Fed watchers, instead of trying to decode Fedspeak into English, could try to master it by imagining how popular songs might translate into central bank patois:
Original Artist
"Yesterday, all my troubles seemed so far away/Now it looks as though they're here to stay" (The Beatles)
Fedspeak
The committee's previous forecast of long-term imbalances has shifted due to incoming information.
Original Artist
"Hit me, baby, one more time"
(Britney Spears)
Fedspeak
Nominal energy prices have risen sharply, posing both downside risks to economic growth and upside risks to price stability.
Original Artist
"I got the Roley on my arm, and I'm pourin' Chandon" (Snoop Dogg)
Fedspeak
Consumer spending is on track to post sizable first-quarter increases.
Original Artist
"I like it, I love it, I want some more of it" (Tim McGraw)
Fedspeak
The economy has been performing well, inflation remains contained, and the near-term prospects look promising.
Original Artist
"It's hard out here for a pimp" (from the movie "Hustle & Flow")
Fedspeak
The risks remain tilted to the upside.
Original Artist
"Let's wait awhile. . . . Let's take it slow" (Janet Jackson)
Fedspeak
Let us take no action for a considerable period. . . . Let us move at a measured pace.
Original Artist
"I wanna take you higher"
(Sly and the Family Stone)
Fedspeak
The committee judges that some further policy firming is definitely needed.
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