{"id":47396,"date":"2019-07-24T13:09:52","date_gmt":"2019-07-24T18:09:52","guid":{"rendered":"https:\/\/olduvai.ca\/?p=47396"},"modified":"2019-07-24T13:09:59","modified_gmt":"2019-07-24T18:09:59","slug":"federal-reserve-headlines-fact-or-fiction","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=47396","title":{"rendered":"Federal Reserve Headlines \u2013 Fact or Fiction?"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/realinvestmentadvice.com\/federal-reserve-headlines-fact-or-fiction\/\">Federal Reserve Headlines \u2013 Fact or Fiction?<\/a><\/h3>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>\u201c<em>When it becomes serious, you have to lie<\/em>.\u201d \u2013 Jean-Claude Juncker, former President of the Eurogroup of Eurozone finance ministers<\/p><\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">On July 16, 2019, Chicago Federal Reserve President Charles Evans made a series of comments that were blasted across the financial news wires. In the headlines taken from his speech on the 16<sup>th<\/sup>&nbsp;and other statements over the past few weeks, Mr. Evans argues for the need to cut interest rates at the July 31<sup>st<\/sup>meeting and future meetings.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In this article, we look at his rationale and provide you with supporting graphs and comments that question his logic supporting the rate cuts. We pick on Charles Evans in this piece, but quite honestly, he is reiterating similar themes discussed by many other Fed members.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The issues raised here are important because the Fed continues to play an outsized role in influencing asset valuations that are historically high. As such, it is incumbent upon investors to understand when the Fed may be on the precipice of making a policy error.&nbsp;<strong>If asset prices rest on confidence in the Fed, what will happen when said confidence erodes?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Fed\u2019s Mandate<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Before comparing reality with his recent headlines, it is important to clarify the Fed\u2019s Congressional mandate as stated in the Federal Reserve Act. The entire Federal Reserve act can be found&nbsp;<a href=\"https:\/\/www.federalreserve.gov\/aboutthefed\/fract.htm\">HERE<\/a>. For this article, we focus on Section 2A- Monetary Policy Objectives as follows:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/realinvestmentadvice.com\/wp-content\/uploads\/2019\/07\/10.png\" alt=\"\" class=\"wp-image-421443\"\/><\/figure><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">The stock market is at all-time highs, bond yields are well below \u201cmoderate,\u201d unemployment stands at 50-year lows, and prices are stable. Based on the Fed\u2019s objectives, there is certainly no reason to cut rates.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&nbsp;\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Federal Reserve Headlines \u2013 Fact or Fiction? \u201cWhen it becomes serious, you have to lie.\u201d \u2013 Jean-Claude Juncker, former President of the Eurogroup of Eurozone finance ministers On July 16, 2019, Chicago Federal Reserve President Charles Evans made a series of comments that were blasted across the financial news wires. In the headlines taken from [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[303,311,534,15470],"class_list":["post-47396","post","type-post","status-publish","format-standard","hentry","category-economics","tag-fed","tag-fiction","tag-monetary-policy","tag-real-investment-advice"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/47396","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=47396"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/47396\/revisions"}],"predecessor-version":[{"id":47397,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/47396\/revisions\/47397"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=47396"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=47396"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=47396"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}