financialsense.com / TOM MCCLELLAN / 09/22/2016
This article first appeared in McClellan Market Report #515, published Sep. 21, 2016, and reflects a theme we have reported on multiple times before.
We have an unblemished 21-year track record of predicting what the Fed should do, with 100% accuracy. What the FOMC actually does is often different from what it should do. As of the Sep. 21 FOMC meeting announcement, the Fed has missed another chance to do the right thing.
There is only one reason why the FOMC should ever change the Fed Fund target rate, and that is if the rate is in the wrong place. Deciding what is the right or wrong rate is really difficult to do if all you do is look at economic data and complex models with Greek-letter math. It is a lot easier if you just look at the bond market.