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The Fed Reopens Wonderland

Mark J. Grant profile picture
Mark J. Grant

First, it was Quantitative Easing. Then, it was Quantitative Tightening. Now, we are in Quantitative Hibernation.

The hurrier I go, the behinder I get.

- The White Rabbit

The recent minutes of the FOMC may be summarized by the following:

  • Fed removes reference to further gradual rate increases.
  • Fed says it plans to continue with current floor approach.
  • Fed says it's prepared to adjust balance-sheet normalization.
  • Fed reiterates federal funds target is primary policy tool.
  • Fed says economic activity rising at solid rate, and jobs strong.
  • Fed says labor market strengthened, and unemployment remained low.
  • Fed says spending grew strongly, and investment moderated.
  • Fed says core and headline inflation remained near 2%.

If you took Chairman Powell at his word, and inference, in October, November and December, you would come to one conclusion. If you listened to what he said in January, you would reach a different conclusion all together. It is absolutely reminiscent of Alice.

It's no use going back to yesterday, because I was a different person then.

- Alice

It is hard to know exactly what happened. With his "Make America Great Again" baseball cap, did they listen to the Hatter? If they were following their statements, and being "data dependent," then what data changed their viewpoint?

It can't be any public economic data because nothing particularly changed between October and January. Maybe they stare harder at the markets than we realize. Certainly, equities backed up during this time period and the credit markets widened to Treasuries, and Liquidity languished - that can be accurately reported.

When I used to read fairy tales, I fancied that kind of thing never happened, and now here I am in the middle of one!

- Alice in Wonderland

Over more than three decades, and four Fed chiefs, there

This article was written by

Mark J. Grant profile picture
Mark J. Grant is the Chief Global Strategist at Colliers Securities, LLC. The highlights of a 48-year career in the financial services industry include positions as President of an investment bank, head of Capital Markets for four investment banks, and serving on the Board of Directors of four investment banks. He has been designated as a Bloomberg Prophet, one of only 15 globally. Mark is one of the longest serving guests on CNBC’s “Squawk Box”, is frequently interviewed on Fox Business and Bloomberg TV, and is regularly quoted in the Wall Street Journal, Barron’s, MarketWatch and other business publications. His commentary, “Out of the Box,” is subscribed to by over 5,000 money managers and financial institutions in more than 46 countries. He is also the author of a book titled “Out of the Box and onto Wall Street.” While Mark’s institutional clients include some of the largest money managers in the world, he also works with high-net worth individual investors. His unique investment strategy is especially useful for people who need yield and monthly cash flows. He employs carefully chosen closed-end funds and exchange traded funds and notes to produce monthly income for his clients, currently he is able to provide yields are 10%+, however current performance is no guarantee of future results. For additional information, email Mark at Markjgrant@Bloomberg.net.

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