Our good friend John Mason discusses the equity markets recent malaise in the context of increasing Federal Reserve uncertainty. As Jerome Powell takes the helm of the Federal Reserve, will we witness a move away from policies focusing on the wealth effect and an underlying support for risky assets? This remains to be seen but with the composition of the Fed changing dramatically, there is little doubt that status quo is no long guaranteed.
I have spoken about the declining relevance of the dot plots and therefore forward guidance given that many of the authors of those plots will be transitioning. For me, this provides the ultimate uncertainty.