What The Fed Ought To Do
We sound like a broken record on this subject, but the market’s obsession with what the Fed may or may not do with its Fed Funds Rate gives us license to correct the Fed’s erroneous monetary policy.
The Fed ought to get out of the rate setting business.
The Fed ought to allow the Treasury market to set short-term rates.
The Fed’s focus ought to be on managing a stable money supply, which would mean that the Fed ought to continue to cleave away the excess from its balance sheet.
Powell & Company ought to take the Fed’s balance sheet back down to the $4 Trillion range - where it stood prior to the Fed’s dovish overkill response to the dim-witted, totalitarian lockdowns of 2020.
