Quarterly Review & Outlook-4th Quarter 2018

“You could have done better but I don’t mind.”

– Bob Dylan, “Don’t Think Twice”

The power of the Federal Reserve is such that an off-handed comment can spark global market tumult. In an October interview on the pace of rate hikes, Fed

Chairman Jay Powell remarked, “We may go past neutral, but we’re a long way from neutral at this point.” Like a game of telephone, investors heard, We will keep

hiking rates until something breaks.

Then at the Fed’s December meeting, with rumors swirling about his job security, Powell again sent markets lower when he dismissively brushed off a question

about the path of the Fed’s balance sheet. Minutes of the meeting paint a more cautious picture, but minutes are released with a three-week lag.

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