Wise or Wuss

The Fed this week attempted to release itself from Trump’s interest rate bullying by declaring a policy of obfuscation. Moving forward, the Fed may now claim it cannot be blamed for causing any stock market declines because of a tightening policy on interest rates. Many will claim this new unclear path on interest rates is a Powell Put. It may however be a slight policy shift as a declaration to markets that they are now in fact on their own when risking future investments. The Fed is now more likely to see any sharp declines in share prices as a normalizing of markets from years of massive intervention and any future market declines will be seen as just one of many data dependent indicators they will be relying on to determine any future moves. This don’t blame us Fed policy shift may be different from the Greenspan, Bernacke, and Yellen market nurturing in that gains in the market from here will be a negative data point as full employment is likely to bring added pressure to raise interest rate.