EconFact 09/20: Shadowing the SOMC

The Shadow knows!

The Shadow knows!

Today I got a chance to visit the Cornell Club in New York   to attend the Shadow Open Market Committee or ‘SOMC’ for short.

The SOMC is a gathering of economists, pundits and central bankers who respond to the Federal Open Market Comittee or FOMC for short which is where the Federal Reserve  comes together to announce big decisions regarding policy actions.

This SOMC gathering is especially notable because it comes right after the FOMC meeting earlier this week that decided to not taper, or in layman’s terms, scale back its large asset purchase program of $85 billion dollars a month. Esther George, the sole dissenter of the tapering decision and Governor of the Kansas Fed, was the guest of honor and it was nice to hear an alternate perspective of the FOMC.

Some observations:

  • The Cornell Club is kinda nice!
  • Central banking humor is abound here: Esther George’s “This week’s FOMC meeting to tapered  expectations rather than bond purchases…” was met with laughter and applause.
  • Speeches were kept short: there were 7 presenters and all kept their remarks to 10-15 minutes with a Q&A of 5-10 minutes afterwards.
  • It’s free: I walked in without wearing a suit and got a free lunch.

  • The crowd blended in with Ivy League alumni: that is to say, it was mostly old white men. 
  • People presented a lot of critique of the Federal Reserve policy actions and boundaries  but no one ever criticized the monetary policy system and regime unlike Ron Paul.
  • Despite affecting every citizen of the US and perhaps the world; there’s no way someone without extensive economics training could follow what was being said as these students prove.
  • Much less time than I expected was used to talk about tapering or succession  but more about “forward guidance” and “boundaries” of the Federal Reserve.
Takeaway: Like the White House, the Federal Reserve has a response to whatever its policies are worthy of discussion.
Questions? Comments? Compliments (much appreciated). Follow-up? Cool link, bro? Let me know🙂