The Greatest Federal Reserve Cycle Ever

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I know, I know, the extreme left and right are already throwing tomatoes and cabbage at me for saying this. However, the people who complain about the Fed the most are timestamped in the history books of living in a time where the federal reserve accomplished its dual mandate better than any time in history.

I know, the Fed illicit a chemical reaction in people that is really a drug like.  However, you can have constructive criticism of the fed based on ideological views and not go all insane mad on the Fed. Sam Bell on twitter does an excellent job on this.

Dual Mandate is met, for all the haters out there just realize that no matter what you believe, this is the Fed’s record.

– Longest Job expansion ever recorded in history

From Doug Short:
https://www.advisorperspectives.com/dshort/updates/2020/01/23/weekly-unemployment-claims-up-6k
555c6b71729e6914928065503ee45611

– Longest economic expansion ever recorded in history

From Doug Short:
https://www.advisorperspectives.com/dshort/updates/2019/12/20/visualizing-gdp-an-inside-look-at-the-q3-third-estimate

Q3 GDP 3rd Revision Dec 2019

– The most significant job openings ever recorded in history with 21 straight months of more job openings than unemployed workers

From Doug Short:
https://www.advisorperspectives.com/dshort/updates/2020/01/17/job-openings-labor-turnover-clues-to-the-business-cycle
Jan JOLTS

( Please, don’t do the people have been sitting at home looking for work since 1945 act) This is Russian trolling, not American.

– Stable inflationary price trends. 

From Doug Short:
https://www.advisorperspectives.com/dshort/updates/2019/12/20/two-measures-of-inflation-and-fed-policy
December Core CPI PCE

Now, that’s their job to manage, so they did well.

Criticism part from me.

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Back in August of 2015, before the fed first rate hike and after the dollar most significant increase, I brought this statement out.

“In an interview with Bloomberg. I said they need to change their metric because unemployment is dropping too fast due to the Labor participation rate.” 

  “Another view I’ve held for years is that they should raise their inflation metric to 2.25%-2.50% on PCE.”

 “I am sticking to my model that 3% FED Funds and 3.7% on 10’s are recessionary rates with some duration after these levels”.

Article Here:

The Fed And The First Rate Hike

https://loganmohtashami.com/2015/08/16/fed-and-the-first-rate-hike/

My concern was that they were too focused on the unemployment rate %. In their minds, they really believe inflation is just around the corner.
For me, if they just raised their inflation targets to 2.25% – 2.50% on PCE rate of growth back then. Then just wait for that event to occur, before they think about raising rates, I would have been ok with that.  Now, of course, that didn’t happen. However, I am not going to deem them a failure when they have accomplished their dual mandate better than any time in history.

One of the reasons why I believe that this is the best federal reserve cycle is that now the Federal Reserve is listening to the notion that maybe you don’t need to raise rates so fast when real breakaway inflation hasn’t occurred.  Every year I wrote an article about the Fed that needs more inflation, but my last article states my view clear.

The Fed Being Too Tight Now Is Just Silly

https://loganmohtashami.com/2019/10/02/the-fed-being-too-tight-now-is-just-silly/

If you’re looking for a perfect world, don’t go on twitter finance. The same people that thought that the Fed was too easy,  that being easy would lead to a dollar collapse, that it would lead to much higher inflation and the Fed is also too friendly for the markets. They’re now saying the Fed is too tight, Inflation is too low, the dollar is too strong, and the Fed should help the markets. Some of these same people are now nominated to join the federal reserve. The Federal Reserve talk on twitter reminds me of a Hieronymus Bosch painting.
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Logan Mohtashami is a financial writer and blogger covering the U.S. economy with a specialization in the housing market. Logan Mohtashami is a senior loan officer at AMC Lending Group, which has been providing mortgage services for California residents since 1987. Logan also tracks all economic data daily on his Facebook page https://www.facebook.com/Logan.Mohtashami and is a contributor for HousingWire.

 

 

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