Big communication task for FOMC today

US Federal Open Market Committee (FOMC) has big tasks in their hand today to communicate the market well enough about their current stance and plan of action ahead. With no press conference scheduled for later, it is no easy job.

Market has become extremely jittery over first rate hike from FED, in spite of policymakers' assurance that long term path of subsequent rate hikes would be gradual.

It is true as some FED policymakers have pointed out that, world is an uncertain place which makes FED policy even more uncertain, though they would prefer to provide as much clarity is possible.

In reality FED communications has remained kind of vogue, it has been like walking through a fog with only assurance that there would be light (rate hike).

So question naturally comes -

When?

• Answer is depends. Can't say for sure........that's ok. Understandable. Since uncertainty around the world economy.

So what will make this when a bit certain?

• When FED will have reasonable confidence that inflation will reach 2% in the medium term and some further improvement in labour market.

Dear FED, please define some -

• Still trying to come out or it's a strategy to keep it vague and keep up the guessing game.

When will FED be reasonably confident?

• Serious clarification needed. After almost six years of easy monetary policy FED has reasonably failed its inflation target in the medium term looking at it from 2009-10. So does this medium term even exist or it's a LaLa land.

By not clarifying FED is imposing big cost to global economy. It would not be unfair to say emerging market outflow gathered pace as FED hinted a rate hike, everyone went to defense mode awaiting FED hike in 2015. Now that credibility is at stake if not communicated clearly.