The Most Interesting Thing From the Fed Meeting

After the August and September FOMC meetings, I began writing about the "healthy dissent" among voting members. Three "hawkish" Fed presidents from Dallas, Minneapolis, and Philadelphia were worried about the looming threat of inflation on the horizon.

And they did not want to put the date-stamp of mid-2013 on "exceptionally low levels" of the Fed funds rate, or to increase bond purchases with Operation Twist or any other twist. From the September statement...

"Voting against the action were Richard W. Fisher, Narayana Kocherlakota, and Charles I. Plosser, who did not support additional policy accommodation at this time."

What a difference a few weeks of Euro-Greek tragedy and lower growth forecasts makes. The voting shift went from 3 dissenting hawks, to one dissenting dove, Charles Evans of Chicago.

Our resident quant Dirk Van Dijk summed it up well yesterday...

"Last time the dissents were against doing anything to help on getting the economy moving again. This time they decided to ignore the full employment side of the mandate and not do anything new, and Charles Evans dissented."

In August, I started to call this tug-of-war very healthy for our economic future. It's a debate that is already raging in our economy, so we need to know that our best and most-dedicated economic minds are focused on it.

The Most Interesting Thing from the ECB Meeting

Following this morning's ECB decision to cut interest rates by 25 basis points to 1.25%, the new man in charge of the bank, Mario Draghi apparently wanted to show some backbone in his debut with this shot to reporters...

"What makes you think that becoming the lender of last resort for governments is what you need to keep the euro region together?"

Wow. Bold words in a time of Euro-crisis. Granted, the ECB has a single mandate to preserve price stability (i.e., control inflation) while our Fed has twin, sometimes dueling, objectives.

But the good news is that markets are not reacting negatively to this statement. We already had a heads up about it last week when the ECB bazooka was taken out of the potential arsenal to support the EFSF.

Now that he said it so clearly, and markets are just focused on Greece coming back on the reservation, the rally can get back to its business of going higher.

Kevin Cook is a Senior Stock Strategist with Zacks.com.

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