The Fed: Mind Games

(1) Goldilocks growth, especially on y/y basis. (2) No recession here: Both CEI and LEI at record highs during September. (3) Yield curve spread still positive contributor to LEI. (4) Two identical strangers: The yield curve spread and the unemployment rate. (5) Stock market confused by conflicting fiscal and monetary policies and mixed Q3 corporate earnings reports. (6) Fed’s confidence in the economy spooking investors, who now fear that 3.40% fed funds rate is more likely in 2020. (7) Fed replaces “accommodative” with “restrictive” lingo. (8) FOMC remarkably gloomy about long-run economic growth. (9) We pick a quarrel with Fed Governor Quarles.