The Fed wants to keep economic growth stable, yet still uses monetary policy techniques from its founding in 1913 to manage a 21st-century global real-time economy.
In an interview with Forbes, TIBCO CEO Vivek Ranadivé sheds light on this problem by comparing the Federal Reserve to a thermostat that you can only change once every three months –“ your house would always be under-heated or over-heated with no ability to regulate temperature day to day or even hour to hour. Imagine being stuck in a house warmed or cooled to the temperature of three months ago” – not very comfortable, and definitely not efficient.
In an era when you can day trade stocks in real time based on a bank’s ability to send 4.2 million messages in 237 nanoseconds (thanks to TIBCO FTL™), and global stock markets can plummet with any news from Europe, the Fed languidly ponders how to stabilize the economy.
