In recent months, the shifting stance of the Federal Reserve Board (FRB) has caused markets to ebb and flow. The FRB is supposed to be predictable!

Transparency:  That is what the FRB strives toward. The more transparent they are, the less shock waves will ripple through financial markets.  Fail. It is one thing to be transparent, it is a whole different thing to expose unnecessary short-term deviations of your long-term objective. If the FRB is undertaking a rising rate policy, which they are, that should be the message. If timelines expand or contract as the economy adjusts, so be it, but it does not need to be so heavily noted.

A month ago, the FRB message was very hawkish referencing a rate hike and balance sheet reductions. This last week the FRB Chair testified before congress indicating that momentum has slowed and they are in no hurry to reduce the balance sheet, dovish. Monthly dovish/hawkish variance is becoming a hindrance to the markets.

Have you ever seen, or played in a game, where it became more about the botched calls of a referee than about the performance of the players? It can become frustrating as you see a high level of play get washed out by a meddling referee who steals the show. Rather than investors making moves based on valuation, they are hanging on the next word of the FRB…

Congratulations, Janet Yellen, you’ve become a meddling ref!

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