I try not to editorialize too much in this space, but today I’m going on a small screed. I simply want to ask…
What the hell is the Fed doing?
No need to bury the lede; Chairman Powell should raise rates a full 1% (100 basis points) next Wednesday and then shut up and stand down for the next year.
Actually, my real point is the housing market is due for a major correction and that will have major ramifications for the stock market over the next 6-12 months.
Questioning the Fed is not new or solely being asked in some small corner of finance or a small circle of academia; the central bank’s control of monetary policy has become a pervasive part of how the economy functions. Since the financial crisis back in 2008, the Fed’s actions have become the singular driver for asset prices.
That period covers… four administrations, three Fed chairs, two recessions, and one policy error after another as the Fed has gotten nearly zero right since the turn of the century.
And now, they are about to make another mistake.
