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Howling at the Moon

The prize for the week’s wildest metaphor goes to PIMCO, talking about the Fed. No longer content with hawks and doves, now we have wolves. Central banks are like a wolf pack, you see, with an established hierarchy of alphas, betas, and omegas.

Officials already usually think “hawk” and “dove” is a bit birdbrained, trivializing the deeper arguments at stake. The labels risk  turning serious policy into a Disney-fied caricature, or now a pack contest of fur, fangs and claws. Crescenzi and the others at PIMCO are nonetheless right  that what matters most is where the leadership group on the committee is.  Bernanke is more willing to tolerate as many as three dissents if really necessary.

But the metaphors downplay how open most of the committee is to new evidence, which can rapidly change predispositions. The key is still not so much “some” or “many” in the minutes, as what will cause the committee’s view to change.

Wolves  have a habit of changing course and savaging sheep who follow blindly.

Incidentally, the best recent wolf metaphor is the Chinese novel which recently broke all publishing records in the domestic market, Wolf Totem: A Novel.


2017-05-11T17:32:59+00:00 February 22, 2013|Books, Central Banks|