Update of Fed/Congress prediction

In my 2011 Predictions I said the following:

• “Federal Reserve (monetary policy) – The Fed will continue to be impotent quantitatively having pulled all of their policy levers already.  Instead, the power of the Federal Reserve will be qualitative.  In other words, what they feel is happening in (i.e. their commentary and opinions about) the world economy will be more important than any specific action that they will make.  They are also likely to leave interest rates flat for all of 2011.
• Congress (fiscal policy) – Will be gridlocked and unable to make any substantive changes.  There will be movement on taxation and pro-business type issues.  In particular, look for an extension of the Bush-era taxation environment.”

Though published December 13th, this list was actually created in late November.  Well what is one of the members of the Federal Reserve Board thinking about these issues?  At the Manhattan Institute Richard Fisher, President of the Federal Reserve Bank of Dallas, said, “The Fed has done much… to provide the bridge financing until the new Congress gets to work restructuring the tax and regulatory incentives American businesses need to confidently expand their payrolls and capital expenditures here at home.”

I couldn’t have asked for a stronger endorsement for why you should be reading the “what my intuition tells me now” blog on a regular basis.  Thank you, Richard Fisher.

Jason