There's Better Stuff to do Than Read the Fed Statement

There will be a lot of attempted reading of the "tea leaves" in the Fed statement released today. But, there really is not a lot there to get a sense for any changes in Fed policy.

Instead, it is best to watch three items:

1. The effective Fed Funds rate.

2. The H.6 report on Money Stock Measures.

3. The H.3 report on Aggregate Reserves of Depository Institutions and the Monetary Base.

The effective Fed Funds rate will show data on where the rate is relative to the target. Right now, for reasons still unclear, it is bumping up against the top end of the Fed's target rate.

The H.6 report will provide data on the rate of money supply growth, which Bernanke has slowed again.

The H.3 report will provide data on excess reserves and help signal when banks might start loaning out the bundles of cash they have sitting on the sidelines.