WASHINGTON, D.C. — Federal Reserve officials emerged from a series of pre-meeting appearances Tuesday to signal caution on further interest rate cuts, on making sudden movements, on ordering the fish, and on any decision more consequential than which lanyard to wear to the December policy meeting.
The signaling, delivered across four separate speeches and one regional banker luncheon, contained the word “prudent” 31 times, the word “data-dependent” 19 times, and the phrase “we are watching closely” so often that a Bloomberg terminal briefly mistook it for a stock ticker.
“What the committee is really telegraphing here is a posture of measured restraint,” said Hollis Vandermeer, who runs the monetary policy desk at Beacon Strategy and has spent eleven years professionally translating Fed officials saying nothing into op-eds about what they almost said. “They’ve moved from cautiously optimistic to optimistically cautious, which is a meaningful shift if you squint and have a mortgage.”
Chair Jerome Powell, speaking at an event so dry the catering staff applied for hazard pay, told an audience of regional bankers that the path forward would require the Fed to “proceed carefully,” a phrase he has now used in every public remark since 2022, including at his daughter’s wedding.
Other governors fanned out across the speaking circuit to reinforce the message that any future rate decision could go in any direction at any speed for any reason, a framework officials described as “flexibility” and which markets described as “please, for the love of God, just tell us something.”
By Tuesday afternoon the Dow had risen 200 points, fallen 240, risen 180, and finally settled exactly where it started, having correctly interpreted the day’s guidance as eight hours of a man clearing his throat.
Wall Street analysts, who are paid roughly $400,000 a year to translate the Fed into English and then translate the English back into a different, more expensive English, said the central bank’s communications strategy had entered what one called “the Möbius phase,” in which every sentence loops back to its own opening clause without ever making contact with a verb.
A senior staffer at the Eccles Building, asked whether the December meeting might produce an actual decision, paused, looked at the floor, and said the committee was “keeping all options on the table,” then quietly removed two of the options from the table and replaced them with a small bowl of mints.
Critics on both sides of the aisle accused the Fed of indecision, with one Senate Banking Committee member complaining that Powell had spent the entire fall “using more hedge words than a suburban landscaping company.” The Fed declined to confirm or deny the comparison, citing ongoing data review.
The December meeting is expected to conclude with a statement that is either materially identical to the previous statement, materially identical to the previous statement with one comma moved, or a 25-basis-point cut accompanied by language so heavily caveated it will arrive at member banks pre-shredded.