The Fed Is Trapped: The Naked Emperor's New "Reaction Function"

``... if the Fed hiked to maintain some semblance of credibility and to prove that it isn't outright lying about being "data dependent" , it would have risked accelerating EM capital outflows, which would in turn prompt further FX reserve drawdowns and serve to amplify the effect of "liftoff", in the process turning what should have been a merely "symbolic" move into something far more dangerous... The Federal Open Market Committee (FOMC) decision to stay pat reveals a new monetary policy rule in place--one that amplifies the importance of international and financial market developments. ''