Tokachi Group - After appearing to “wimp out” of raising interest rates at its last meeting in September, the US Federal Reserve has begun an aggressive crusade to salvage its credibility.

Less than 48 hours after deciding not to raise interest rates, no less than 5 voting members of the Federal Open Market Committee (FOMC) which sets monetary policy at the Fed, have been seen and heard to insist that a rate hike this year is still a distinct possibility.

“It’s ridiculous,” said a Tokachi Group strategist. “When the FOMC announced its decision, it did so with only one dissention, that of Jeffrey Lacker. Then, not even 2 days later, those same voting members who decided against a rate hike are out in front of the camera trying to convince the market that they really will raise rates at some point this year,” she added.

The Fed’s rate decision itself wasn’t the most surprising aspect of the meeting’s outcome. Chair Janet Yellen’s statement appeared to suggest that the central bank’s mandate had been expanded to factor in the effects of turbulence in emerging markets, China in particular, when setting monetary policy.

Tokachi Group called the Fed’s volte-face “positively egregious” in an analyst’s note to institutional investors in the hours following the rate decision.

“The Fed’s maintained that rate hikes are data dependent and yet they’ve sent these various voting members out to effectively promise the markets that rates could rise before the end of the year. That’s reckless especially when they don’t know what the economic data’s going to tell them in the near future,” explained the strategist.