What shade of blue are you?

The Federal Reserve voted to keep rates unchanged today, but the vote came with glitch. “Voting against the policy action was Thomas M. Hoenig, who believed that economic and financial conditions had changed sufficiently that the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted,” the FOMC statement explained.

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The Fed announced that the target range for Fed funds would remain at 0% to 0.25%. This will suprise no one, given the weakness in the labor market, the rising political vulnerability of the President (who makes his State of the Union speech tonight), and recent questions about Bernanke’s reappointment prospects. Is the Fed funds rate really that susceptible to political factors? Probably not, but thinking that it might be is no longer beyond the pale. How it’s come to this isn’t easily explained, but it’s clear that insuring monetary policy remain independent of politics is as compelling as ever. Arguably the potential for politicizing the Fed is higher than at any time in recent memory. At the very least, there’s more confusion than usual.

A little perspective never hurts when surveying the equity landscape. There are no silver bullets, of course. But we must start somewhere in the thousand-mile journey of analyzing the possibilities in the land of equities, and a big-picture review of the global playing field is a reasonable way to begin.

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