Follow up on Points to Ponder from Yesterday

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Twitter: @JohnNetto

Yesterday's points to ponder got a lot of responses and I would like to address some of the back and forth I've been engaging in with readers in a special bonus edition of points to ponder this AM

-First and foremost I am not an Apple hater. I'll admit I do not own an iPhone, iPad, or iTouch. But the fact that I use a Blackberry personally has no bearing on my choice not to delve into this week's awe inspiring results. Frankly, I just do not think thatApple is really that important from a macro point of view. Having said that avery good friend and someone who views I respect greatly made the point to methat one of the things that made markets swoon the way they did in Q4 was thebad news out of Apple and now that this issue is fixed it opens up the topsidein the equity market in the US in particular. I suppose I buy that but I willsay that the best thing I read on the Apple story was Macro Man blog's take on asking what thepublic would think about all of the earnings worship going on for Apple rightnow if the company was in another line of business say banking orenergy.......now that is an interesting thought......
-On the Fed, one of my good friends and an avid reader made 2 very good points yesterday. First while the Fed put their next rate move date at 2014, the break out of the 17 person FOMC only showed 3 members projecting a move in 2012-'13 and they were non-voters who were dissenters last year. On the other hand 4 members forecast a move in 2015 and two were looking for the first policy move to come in 2016. While the consensus was that the FOMC was dovish that stat really drives the point home. She also made the very salient argument that the Fed's inflation forecasting mechanism (now explicitly set at 2%) is boneless. She noted that with all of the caveats around this target, including that it is a "longerrun" goal etc, there is really no recourse if they do not defend inflation levels.  
-From where I sit the lack of real resolve behind the Fed's hard inflation target isn't an issue. The problem I have is the timing of this new tool. We've just witnessed almost every major inflation targeting central bank get tripped up on this issue and the Fed has decided to paint itself into this corner. Consider the ECB, who over thepast 2 cycles had the bad sense to target topline inflation and hike into a pair of financial crises/economic slowdowns. The BoE had the common sense to stop watching their target for a few years now although they've caught considerable heat in political and academic circles the past 2 yrs over this move - it's a good thing King was stubborn on this front, it has proven to be good policy. Seeing the ECB/BoE experience begs the question why the Fed would voluntarily move toward a hard inflation target. Why don't they wait until the economy is in recovery and gets to the point where it is in run-away-hyper-inflation mode (which is the risk given their extreme policies in recent years) before adopting this policy tool? That is after all how the BoE and others wound up in this policy paradigm.