Please pay attention. This is important.

With the FOMC statement coming out tomorrow markets have already received glaring signals of intent and rationale from certain corners of the Federal Reserve system. Observe:

Exhibit 1: Cleveland Fed's April Fed Funds futures chart, produced at end March:



Exhibit 2: Cleveland Fed's April Fed Funds futures chart, produced at late April:
The colours, man, the colours.

Carl Jung (who dat?) said that colours express the main psychic functions of man and (this part he clearly implied) central banking institutions. So obviously the shift away from an eye-troubling, acid-dropped inspired electric blue gradient powerpoint background is significant.

Feng Shui (known as "FS" from here on out) fans (reply pending from Mr Bernanke on this count) will rhapsodise about blue, its yin energy and qualities of love, healing and hope. It is, apparently, their colour of intellect and wisdom. But maybe they were unfamiliar with the depth of powerpoint's features when they decided this.

So what to make of this shift to the kind of grey background palette favoured by the New York Times' excursions into graphism? Well, it's a grey area. Some FS peddlers will see it as indicative of fear, frustration and hopelessness. Others reckon any combo of black and white is a consensual compromise and therefore an ideal balance of opposing views. Hmm. So even pure FS has its limits. Maybe academia might assist.

Rikard Küller (no, I did not make up that surname for the purposes of this piece) conducted a study in 1976 (good luck if you attempt to read it) on the effects of colour on men (and women although here, in Fed context, that is mostly incidental) in two opposite environments - one grey, the other colourful. Various medical devices monitored pulses and so forth. Grey increased heart rates, stressed the boys out and made them bored. Küller suggested that the guys could not get into the the mental 'zone' when in grey.

So just what is Cleveland trying to tell us on behalf of the FOMC? A brief 'delta colour' summary of the top two most probable outcomes (quoting liberally from "Living Colour" by Rossbach and Yun) may help further:

2% outcome. Was pink ("joy, happiness, romance") now green ("hope" "tranquility" "growth")

2.25% outcome: remains orange ("happiness and power")
Conclusion: look on my works, ye Mighty, and despair. Unimaginative, pressured and bored they may be but the Fed stays the slash and pray course convinced more and more that penalising savers - plus a whole lot of other collateral damage - is an appropriate price to pay to the desire for US growth and tranquillity. Eventually.

And that's the unadulterated power of FS for you.

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