Whose Speeches Move Markets?

Interesting chart illustrates which Fed members’ public speeches move the markets:

As in previous years, public communications by the more hawkish members of the Committee continued to elicit a measurable market reaction, despite the fact that the FOMC is dominated these days by a center-dove coalition that is aligned with the Chairman. President Hoenig is a case in point: He dissented at every single meeting last year, making it very clear that he was out of the Committee’s mainstream. Yet, his communications nevertheless did matter in the eyes of the market, inexplicably in our view, perhaps because they helped the market see both sides of the policy debate.

Possibly just spurious correlations in here? But I think this highlights the fact that monetary policy works largely through expectations and communications and, thus, that there’s a witchcraft element to basic macroeconomic stabilization that people find distressing to contemplate.