Fed does nothing, take 4

Here's the text of the just-completed Federal Open Market Committee meeting. The Fed kept rates stable at 5.25% for the fourth meeting in a row ... with the last hike on June 29.

Some highlights from the post-meeting statement:

- The Fed pointed out that economic growth has slowed this year, attributing it to a "substantial cooling of the housing market." The qualifier "substantial" is new, indicating that the Fed may be more pessimistic about housing.

- The Fed said that "readings on core inflation have been elevated, and the high level of resource utilization has the potential to sustain inflation pressures" -- references to the fact the core CPI is still above the Fed's preferred range and the fact the unemployment rate remains low. But officials also argue that stabilization in energy prices and past rate hikes will work to alleviate those inflation pressures.

- Once again, Jeffrey Lacker dissented in favor of a quarter of a percentage point interest rate hike.

What I can't understand is why the Fed continues to focus purely on the REAL economy and say nothing about the FINANCIAL/ASSET economy. The European Central Bank makes a point of discussing money and credit growth. Other central bankers do, too. Yet the Fed continues to stay mum about the explosion in new credit, the worldwide surge in money supply, the spree of multi-billion dollar LBOs, the gigantic surge in commercial real estate values, and several other indicators that monetary policy is anything but tight. Sigh...