EPISODE · May 22, 2023 · 10 MIN

Sizing up the angles on Fed policy

from Notes on the Week Ahead · host Dr. David Kelly

I am shockingly, comically bad at golf.  However, that doesn’t stop me from occasionally watching more gifted souls play the game.  One of their techniques is to examine a putt from multiple perspectives.  They take a careful look at the green as they come up to mark their ball, look at the putt from the side, squat down to consider it from the opposite direction, and generally scout out the lay of the land from all angles.  For myself, since I’m generally wielding the putter playing my seventh or eighth, I don’t further test the patience of my companions with such preparations.  However, I will admit that, for the average golfer, looking at a putt from multiple angles yields useful information. A similar rationale can be applied to monetary policy decisions.  Changes in monetary policy are among the most important drivers of stock and bond returns.  Consequently, one of the questions we are asked most frequently is where will the federal funds rate be at the end of the year?