FOR IMMEDIATE RELEASE
Dateline: Washington DC. US stock and bond markets reeled and the dollar declined against the yen and the Euro today when it was revealed that the phrase “measured pace” contained in the statement released yesterday by the Federal Open Market Committee was reported in error.
Apparently, Chairman Alan Greenspan, who had written the memo by hand during the meeting, had dragged his elbow across the still-wet ink on the paper, smearing the key phrase beyond recognition.
At a press conference today, an unnamed Fed spokesman said Chairman Greenspan had meant to write that from now on monetary policy would be a “leisured race”, to show the Federal Open Market Committee’s intention to both slow down and speed up the nation’s money supply simultaneously.
High-ranking officials at the meeting, who declined to be identified, questioned the Chairman’s recollection, saying they distinctly remember a lengthy discussion of a “treasured vase” the Chairman had recently purchased at an antique shop in Georgetown, and a second conversation at lunch during which the Chairman described the new Hooters restaurant on M Street as “quite a place.”
Markets were understandably upset by the Chairman’s shoddy penmanship. One bond trader indicated he had spent all day on the trading floor without seeing one “pleasured face.”
NB: Monetary policy is not about words. It is about the availability of credit.