Bringing Tablets Down from the Virtual Mountaintop
The Fed’s new long-run strategy departs fundamentally from its prevailing orthodoxy, so much so that it is hard to understand why “longer-run” remains in the title.
The Fed has been disciplined in their rollout of the long-run strategy document so we should expect them to be similarly disciplined about a rule. From the minutes we know the clock is ticking. In our view, the safe bet is they will have it in place by the end of the year. That implies either an announcement in September or December. Given that there is an election in between, they probably will opt for an announcement before, not later.