FED: There is much less than meets the eye in the G20 communique, at
least with regard to monetary policy. Considerable publicity was generated by
the following line in the joint statement: "All our central banks maintain their
commitment that monetary policy settings will continue to be carefully
calibrated and clearly communicated, in the context of ongoing exchange of
information and being mindful of impacts on the global economy." But, as the
word "maintain" implies, this is not some new pledge binding the Federal
Reserve, the European Central Bank and other monetary authorities to work
together. That language is a near verbatim repeat of what was contained in the
Oct. 10-11, 2013 G20 communique: "We will ensure that future changes to monetary
policy settings will continue to be carefully calibrated and clearly
communicated." Moreover, calibration is not equivalent to those other "C" words
-- coordination and collaboration. And what "carefully calibrated" means to
emerging market nations is apt to mean something entirely different to the Fed
and other advanced countries' central banks.
