by Adam English
There is no doubt in my mind that the Fed has been molded into a tool.
Not by or for politicians, or banks, but Wall Street. It naively took it upon itself to take on a new job unrelated to monetary policy, ventured into the business of manipulating stock values, was captured, and was monetized.
Yesterday was a prime example. All of the headline numbers are actually pretty strong. The case was clearly made from the monetary policy side for a modest hike.
Some data points for the Fed’s dual mandate have oscillated around, but inflation is certainly under control, the official unemployment rate is as good as it realistically gets, wage growth is picking up, and applications per vacancies is way down.
However, on the market side, we can find a number of reasons that the Fed could rationalize putting off a raising the Fed Funds Rate for its new Wall St. overlords.