The Federal Reserve Is Just Winging It!

The Federal Reserve Is Just Winging It! www.watchdogonwallstreet.com

Episode Transcript

Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.

Speaker 2 (00:16):
In a pretty much what jaw dropping interview yesterday on CNBC,
Kevin Warsh comes on. He is Hoover Institution fellow. He
is a former Federal Reserve governor, and he said what
we have been saying here on the program, and again

(00:39):
I get it here. We're going to tell you the
truth here on this podcast. Oftentimes they you know, they'll
talk around the edges, but they just don't come out
and say it on the news, especially CNBC. And honestly,
Squadbox is the best program that they have. The quiet part, yeah,
he said the quiet part out loud, and it's funny.

(01:03):
The left of center guy Andro rosorkin his jaw basically
dropped the Federal Reserve. He offered basically a rebuttal to
what's been taking place and scratching your head when it
comes to interest rates and a fifty basis point move.

(01:25):
And he coming out and saying that, well, if the
Fed is following certain rules, right, you know, we love
saying the phrase following science. Well, if the FED is
following their science and what they they say that they're
how they go about doing things, and how they they
come about decisions, then there's no rationale for that fifty

(01:48):
basis point hike. And if there's no rationale for that
fifty basis point hike, well then maybe the Federal Reserve
is political. No, say it ain't so, well it is,
so he began explaining why he thinks that the Fed's
decision to cut fifty basis points goes against what the

(02:10):
FED has been saying regarding their policy. And I quote,
they've had different theories about the cause of inflation and
the measures they use, and people in the financial markets
have tried to follow them. A few years ago, they
were for flexible average inflation targeting. That was when inflation
was at one point seven percent. They said, oh, well,

(02:31):
get a little higher and try to balance it around
two percent. But they don't have a broad new strategy
core PCE. That's what we should focus on. But it's
not running around two point seven percent, nowhere near their
two percent target, and they're constantly changing the metric. A

(02:55):
year ago, they said the best measure of inflation is
core services x housing. Well, you know that's that's run
around four percent right now, four percent range. Janet Yellen said,
a the FED model is wages. Well, wages are running

(03:17):
around three percent, and well it's consistent with inflation. But uh,
wages are running around four percent growth currently. So again
they don't have any sort of model. And this is
a warning that he gave. He said, in a world
this dangerous, with fiscal policy so irresponsible, the Central Bank

(03:42):
needs to be very clear about its reaction function, be
clear about its goals, and not look like it's lurching,
because that's what has put us in the mess we
have again, he alluding to the Federal Reserve allowing allow
both Republicans and Democrats over the years borrow and borrow

(04:07):
and borrow and spend, quantitative easing, monetizing that doing all
of these things, which has allowed them to spend and
spend and spend and has put us in this position
that we're in today. Again. I I wish the Federal Reserve.
They call it independent, it's not independent. It's not. They

(04:30):
do whatever Congress tells them to do. They want more money,
they print more money. This idea out there, this this
lie that they're somehow independent. They're not. They're just there
to do you know, basically, Okay, okay, we'll do it.
We'll put more money for Congress so they can continue

(04:50):
to spend and spend and spend. They should actually be
coming out and saying enough's enough, but no, they won't.
They won't do that. And again, U their policy, what
are they doing? How are they deciding on things? Again,
it's like roulette. Quite frankly, there's no rhyme or reason

(05:11):
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