June 3, 2016
Bloomberg: The Fed Is as Clueless as You Are
As clueless as I am? I beg to differ! The wise and omnipotent Fed can do no wrong, whereas I, just yesterday, nearly forgot where I put my car keys. Took me 10 extra seconds to find them. No joke. I'm not even in their league! I am humbled that you would think so though. Very humbled.
Bond traders are looking for certainty in an uncertain world, so it's comforting for them to think the Federal Reserve has some secret trove of economic data or corner on wisdom that it uses to make Important Decisions, like the timing of interest rate increases.
I bought long-term bonds. I own long-term bonds. I'm not a bond trader. I'm a bond consumer. That said, I do find comfort in thinking that the wise and powerful Fed is not only omnipotent, but also omniscient. Great comfort. In some ways, this blog is dedicated to their wisdom and the unintended consequences of their wisdom.
Some analysts noted that the Fed has lost credibility. But perhaps traders have just had too much faith in the omniscience of central bankers all along.
Can one ever truly have too much faith in the Fed? Was Ben Bernanke not Time's Person of the Year in 2009 for his masterful role in navigating us through the most disastrous economic bloodbath in modern times? You know, the near total and utter economic collapse that the Fed was supposed to prevent in the first place?
Perhaps I am wrong. Perhaps we can all be as clueless as a small group of elitist ivy league economic fortune tellers working behind closed doors blindly staring at antique rear view mirrors, who also think that they alone can and will be smarter than the markets as a whole. Or am I simply overestimating the power of sarcasm? ;)
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