Two months after the December FOMC debacle we can now look back and see how ridiculous these guys really are. No matter what it says on their resumes. They haven't spent any time studying the markets, and they know nothing about what the markets really run on which is confidence. Confidence at the 1987 bottom......confidence at the 2009 bottom when Ford was selling at 90 cents a share. And just recently in December. When confidence gets vaporized, there are no answers. Not a good place to visit just for the fun of it.
Nobody with a brain does a rate hike when the RUT is showing a death cross like in December. The RUT is leveraged to the job creation side of the economy. The big mega cap companies are net job vaporizers. We have a whole room of FOMC members that have never heard about this.
Rate hikes combined with the balance sheet reduction.....the Yellen creation. If you want to normalize rates, don't even think about ramping up the balance sheet reduction at the same time.....you've never done that before, remember. All you have to do is set the balance sheet reduction at a relatively low level and keep it there forever. The market won't care one way or the other. It's like the boiling the frog trick.....don't ramp up the water temperature. The frog is sure to figure it out and jump out of the pot. The FOMC guys like Yellen and Powell just don't think right.....you can't depend on them to have the right reasoning process 99 percent of the time.
Powell thinks the the December thing was just a market tantrum that interrupted their normalization plans.....that couldn't be further from the truth.