The Fed might have buried a key policy signal to investors in its March statement

Federal Reserve officials craft their policy statements knowing every word will be carefully scrutinized on Wall Street.So when the Federal Open Market Committee, the Fed's policy-setting arm, added the word "symmetric" to a description of its official 2% inflation target, the central bank was clearlytrying to send a signal.The trouble with this kind of cryptic Fed transparency is that it often raises more questions than answers. What was the Federal Reserve trying to say'Yellen was asked about the addition of the word during her post-meeting press conference, and she largely downplayed it.But oneexplanation for the word's inclusion is that by emphasizing the symmetric nature of the inflation goal even as the Fed raised interest rates for the second time in four months, Fed Chair Yellen and her colleagues were telling the world, "we will be just as aggressive in fighting above targetinflation as we were in fighting below target inflation."Minneapolis Fed President Neel Kashkari, who dissented against the decision because hewanted to keep rates on hold, hinted at this when heofferedan indication of the word'simportancein a statement justifying his dissent."Importantly, we have said that 2% is a target, not a ceiling, so if we are under or over 2%, it should be equally concerning," Kashkari said.UBS economist Samuel Coffin echoed this in hisinterpretation of the Fed's inclusion of the word symmetric to describe its inflation target."We think the FOMC is warning against thoughts that it might temporarily let the economy run hot or might countenance above-trend inflation for a time ' the FOMC would be just as aggressive toward above-target inflation as it has been toward below-target inflation," Coffin wrote in a research note.That could be key if, as some investors expect, global inflation finally does make a comeback this year and next.SEE ALSO:Janet Yellen just made an unsettling admission about the economyJoin the conversation about this storyNOW WATCH: 7 mega-billionaires who made a fortune last year
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