As discussed last week, the FOMC reduced the Fed funds rate by 25 basis points to 1.50%-1.75%. Since then it seems that Fed officials have been messaging to the market that they have the economy exactly where they want it. A pat on the back perhaps?

I had previously pointed out that the Fed was prepared to cut rates not just in reaction to economic difficulties, but in anticipation of them as well (a questionable mandate, in my view, given economists' dubious record of predicting, well, anything). Recent comments by Fed officials indicates that the mandate for now has returned to "accommodative." Also, 4Q19 has been very good for markets (+3.6% QTD) so far and Fed officials want us to know we have them to thank for it. Let's review…

New York Fed President John Williams (per the WSJ): "The three rate cuts we did were very effective at managing the risks' slowing global growth and trade uncertainty present to the U.S. economy…Where we go from here will depend on the information we receive, what we’ve learned about the economic outlook.”

Translation: We give ourselves an A+ in 2019 thus far.

Chicago Fed President Charles Evans (per the WSJ): “'The economy is in a good place, and we made good adjustments to the stance of monetary policy,' and all of those easin...

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