Is There a New Chairman at the Federal Reserve?

This is a little bit of inside baseball, but for close watchers of the markets, there are few names more important right now than that of Jon Hilsenrath.

Jon Who?

Hilsenrath is Chief Economics Correspondent for the Wall Street Journal and a fairly frequent guest on the news and financial channels. He is becoming best known right now as the “Chief Fed Watcher”, and seemingly the recipient of some inside tips on what the Fed is thinking at any given moment (or else just a damn good reporter, which is always possible).

One thing is certain.

Hilsenrath’s comments on the Fed’s intentions are market-movers, which he has demonstrated time and time again with uncanny accuracy. And as recently as twice in the past two weeks he has made what some called “stick saves” of the market with headlines that the Fed is imminently considering QE action.

He has also created a bit of resentment among other market watchers.

The always cynical Zero Hedge calls him “the Fed's faithful mouthpiece-cum-scribe” and claims he hasn’t delivered any new news that most cannot figure out on their own.

Business Insider had an item on Stephen Roach, Yale professor and former chairman of Morgan Stanley Asia, who said of Hilsenrath and his relationship with the Fed:

"They [The Fed] have gone about their usual pre-FOMC leak frenzy where they talk to this reporter and that reporter. Jon Hilsenrath is actually the Chairman of the Fed. When he writes something in the Wall Street Journal, Bernanke has no choice but to deliver on what he wrote....The point is, when they plant a story in the Wall Street Journal, and this story has been planted…. Jon Hilsenrath is the weed that grows…the guy has a perfect track record…"

Hilsenrath was on Larry Kudlow’s CNBC program Wednesday night and really had nothing new to add, except hinting that action was more likely in September than the upcoming meeting. He feels the Fed will want as much data as possible, a full press conference scenario, and want to be “absolutely certain” they are doing the right thing, given that there will be heat on whatever decision they take.

Hilsenrath added, “The Fed is very disappointed with progress on GDP growth and the jobs recovery. Bernanke wakes up every morning asking himself if he is doing everything he can, no matter how incremental new actions might be.”

So, for traders, the question is when will the Fed finally scratch that itch? August 1 or September 13 or not at all? Or will there be hints next week which will have the same effect as the announcement itself?

Maybe the new Chairman of the Fed will let us know before it happens (and perhaps before the final 30 minutes of trading next time).

Good Trading!
David W. (aka The Underground Trader)

David W’s Option Income Generator. service is designed to help tame market volatility by producing monthly income via a proprietary buy-write strategy. Check it out today!

 

Remember, you are in control your email alerts! You can receive alerts for more than 25 free research report alerts including: The “10.0” Report, The Insiders Report, ETF Leaders Report, and The Focus List.