THE NEW GUY WARSH

Rate cuts, rate hikes, do nothing? Everyone yapping away. As you know, we believe the fed to be the most over-rated part of our government…and that is saying a lot. What exactly do they accomplish? Let’s see. Bernanke started the printing and of course called it quantitative easing. Said it would not last long. $9 trillion later. Do you know how many billions the fed has lost? Powell? Don’t get us started. Played God with the bond market creating massive inflation, under 3% mortgages that even to this day, has distorted the housing market. So message to the new guy:

Less is better. Less talk. Less moves. Leave the free market alone. Leave the 160 million of us who go to work every day to do better for ourselves and family alone. Recognize we are the economy and not someone in the Eccles Building deciding on 1/4 point here or there.

Listen to the market. If the 10 year yield goes above 5% with fed funds at 3.5%, you may have to hike. If that yield goes below 4%, you could probably cut. That’s all. If yields stay stable, just hang. Again, listen to the market.

We were not thrilled with this quote from him yesterday: “If the fed gets policy right, and the fed will, then the inflation surge of the last several years will be a thing of the past!”

This quote indicates that he thinks he is bigger than us, that he is bigger than the economy. News flash! We are the economy and the more he recognizes it, the better. Try to do too much and call us worried. Have you noticed how stable the bond market has been in the past year? Don’t mess with it. Jury is still out. Wishing him well.