The “peak Fed funds narrative” is all the rage. The risk rally off the October 27th lows completely overwhelmed the negative market inputs of persistent inflation, excessive indebtedness, deficit spending, weak political leadership, and increased fiscal and monetary stimulus.
An old axiom in finance posits that averages hide more than they reveal. It’s true and supported by history,
as is the view that consensus forecasts will be wrong. The above quote (“Everything we see hides another
thing; we always want to see what is hidden by what we see.”), from the great Belgian artist Rene Magritte,
captures that axiom. Magritte’s art challenges the observer’s preconditioned perceptions of reality, as do
markets and large swaths of market strategy.
“Everything we see hides another thing; we always want to see what is hidden…” Read More »