In simpler times the Fed could configure a forecast of future activity and inflation and fine tune policy toward that objective. When Bernanke and Co. shifted to a monetary (quantitative) regime we worried that they did not establish a robust compass to steer by. Volcker's focus on the M's now had 25 years of scrutiny. "Credit easing" was the original faux metric. A randomly selected size of the balance sheet was next. Now, Nominal GDP, inflation and unemployment targets are being discussed. The process need not be this confusing.
The Fed forecasts for growth and inflation are not tracking reality. If the objective is to target the forecast, then some additional action is warranted. The alternative would be voicing strong language that the projections were still intact. The Fed has opted for a sketchier, allegedly more flexible, approach. Pilots call it flying without instruments. Thus, as the minutes of a contentious 3 dissent meeting were released, Fed spokesmen were trotted out in various formats to "walk back" the difference of opinions.
Central Banks are, by definition, domestic institutions. That Europeans failed to realize this should not deter the Fed from its mission. Bernanke must long to deliver the Col. Jessup line to critics (paraphrased): "You sleep under the blanket of protection that I provide then challenge the manner in which I provide it. I'd prefer you just say thank you and go about your business." The bottom line is all too obvious. The hoped for growth path, marginal as it was, will not be achieved. In typical Pavlovian fashion, more stimulus is dialed up. The consequence is loss of efficacy. We think the 2 day meeting should set a hard target (unemployment rate out) and adjust or hold policy to achieve it. The rest is theater.