It seems like most of the interesting news lately has been sufficiently important to merit separate posts, so these daily reviews have been suffering!

Today Mishkin announced his resignation from the Fed Board:

Mishkin, 57, on a leave of absence from (Columbia University), will step down as of Aug. 31, the Fed said in a statement today, also releasing his letter of resignation to President George W. Bush.

The departure may create an unprecedented third vacancy on the seven-member Fed Board of Governors this year as the central bank tries to ease the credit crisis. The vacancies mean that a new U.S. president to be inaugurated in January may have an opportunity to influence monetary and regulatory policy by nominating new members to the board.
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Senate Banking Committee Chairman Christopher Dodd, a Democrat from Connecticut, has already delayed a confirmation vote for three board nominees for more than a year. After gaining support from the committee, the nominations would go to the full Senate for a vote of final approval.

Hey, who cares about the direction of the world’s most important Central Bank when when there are political games that can be played?

It’s not like the Fed doesn’t have a plateful of problems - JPMorgan is calling for US Inflation of over 5%

Not bad, with long treasuries at 4.6%, eh? Fisher is continuing his anti-inflation drum-beating:

Federal Reserve Bank of Dallas President Richard Fisher said he expects the central bank would raise the benchmark U.S. interest rate should the public begin to expect greater gains in consumer prices.

“If inflationary developments and, more important, inflation expectations continue to worsen, I would expect a change of course in monetary policy to occur sooner rather than later, even in the face of an anemic” economy, Fisher said today in the text of a speech in San Francisco.

Fed bank presidents, including Gary Stern of Minneapolis and Thomas Hoenig of Kansas City, have expressed growing concern this month about rising prices. Fisher, 59, is the only member of the Federal Open Market Committee to dissent three times from decisions to lower the overnight bank-lending rate, favoring either no change or less aggressive reduction.

There’s an interesting and rather heretical piece on VoxEU by Cournand and Heinemann titled Can Central Banks Talk too Much?:

Public information is a double-edged sword: it conveys valuable information, but it leads agents pursuing coordination to condition their actions on public announcements more than optimal. In this respect, Morris and Shin (2002) have shown that noisy public announcements may be detrimental to welfare. They conclude that central banks should commit to withholding relevant information or deliberately reduce its precision. This result has received a great deal of attention in the academic literature, in the financial press (see for example the Economist (2004)), and among central banks.
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Far from being perfect, all these means of communication allow the central bank to provide partially public information and avoid market overreactions to information of poor quality.