Taps Coogan – April 29th, 2021

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Bleakley Advisor Group CIO Peter Boockvar recently spoke with Real Vision’s Ed Harrison after yesterday’s Fed meeting to critique the Fed’s approach of changing absolutely nothing in the face of a recovering economy, swelling deficits, and expectations for rising inflation.

Mr. Boockvar notes:

“There seems to be this ever growing chasm between their policy (the Fed) and the realities of the world, their policy of course being as easy for as long as possible with no hint of tapering until they meet some metrics that they themselves can’t even seem to define…”

“They better hope (inflation) is transitory or else they’re going to be mugged by some serious reality this summer…”

“(The Fed) can’t tell us what ‘substantial progress’ means. I don’t know if that means a ‘Five-handle’ (5-something %) on the unemployment rate, a ‘Four-Handle’ (4-something %), a ‘Three-Handle’ (3-something %), I don’t know if that means getting back the jobs that were lost even though Powell even admitted that some of the jobs might not be coming back… He acknowledged that there is a large demand for labor that is not being met… On the inflation side he can’t even define what symmetry means. 2% average? Well what average are we taking, a one year average, a two year average…. a 30 year average… what does that even mean? The Fed is just winging it.”

If it seems like the Fed is being particularly non-specific about the conditions that would lead them to begin to normalize policy, that’s because it’s not something they’re planning on doing. The Fed is going for broke on ZIRP and QE-Forever, just like they did last time…