"Financial market prices are probably the most important source of information to guide central bankers,"..."But when all the financial markets are doing is reflecting back what we've said, then we're taking the most important source of information and we're being blind to it."
– Federal Reserve Chair, Kevin Warsh

This is going to be interesting to say the least... and I don't know how I feel about it just yet, but here are my initial thoughts and I am going to remain open and reserve the right to change my mind later based on new information.


So it's been a couple of hours after the FOMC meeting with the new Fed Chair Kevin Warsh and there are some things that I like and some things that I'm skeptical on. On the onset I'll say that my opinion on Warsh is a wait and see. He seems to be running a tight ship thus far and I like the appearance and guidance, or lack there of, he had during the meeting.


My view on forward guidance has changed after the meeting, initially I was thinking it was a more deceptive practice that Warsh wanted to employ to give the broader public less insight into monetary policy. However, he won me over and really described the decision making process that the committee had overall and laid out the facts of the matter. He presented it clearly, at least in my opinion and laid out the broader plan of change with how the committee were going to gather / interact with data and trends; especially those given by the broader markets.

It is no getting around it, the markets were reacting to Fed decisions full stop. And as a result of it I think institutions are willing to take more risk with capital knowing what the forward guidance of the Federal Reserve was. He said plainly, they wanted more accurate data from the broader markets and they felt like each were looking to another and pointing.


One thing though that I'm very and I mean very skeptical on is how they are going to track inflation going forward. Listen I agree with Warsh that the way we collect data is outdated and sometimes wholly inaccurate, but I already believe that the inflation numbers are cooked. What my honest belief is right now is that they are going to financial engineer their way to the 2 percent inflation target they've been trying to hit since covid. I mean the rate decision to hold really encapsulates the entirely of this meeting, just a wait and see vibe really.


Those were just my inital thoughts on the meeting today. My overall portfolio is fine, and I agree that the markets need to react without the knowledge of what the Fed is potentially going to do, as I don't think that is their overall function. Again, I agree with Warsh on the broader points, but when you drill down in the details things start to get sketchy.