Tuesday, May 03, 2005

Get a proofreader, Alan! 

The WSJ deconstructs a correction to the Fed's press release raising the federal funds rate to 3%. They left out a usual sentence that says "Longer-term inflation expectations remain well contained." The market went up rapidly at first, thinking the Fed was going to raise rates more rapidly, then turned around when the Fed revised the statement.

The more rapid rise would have been news to the market that the Fed thought growth looked much stronger. So there was churn due to a misprint, and probably a few people lost some money today, because somebody didn't check the statement before it went out.