00:00Mark Habanner of Bank of America looking forward writing the Fed now has a
00:02credibility issue to deal with. We believe they will want to regain control
00:06of the narrative. Mark joins us now for more. Mark good morning. Morning. Are you
00:10upset that the Fed is no longer providing guidance to? No I'm not upset
00:13about that. I just want to understand what the reaction function is and I want
00:16to understand what is the justification for any decision that they make. It's
00:20fine that you don't have to tell us exactly what you're gonna do but the
00:23analogy that we were discussing earlier is if I tell you that I'm gonna lose
00:26weight and I'm gonna lose 15 pounds then you're gonna want to know how I plan to
00:31do that and if I tell you that I'm not gonna do it through diet exercise or GLP
00:34one then you're gonna have to question how committed am I to actually doing this
00:39and that is exactly what the market is doing right now for the Fed. It's
00:43wonderful that you're resolute in your determination to have 2% inflation just
00:47like I'm resolute to lose weight but unless I tell you how I'm going to do it
00:52we will not believe you and you can't fool the bond you can't do it the bond
00:59will see through it and that is our interpretation of what happened last week
01:04and if this continues the bond will continue to reflect a greater inflation
01:10risk premia and more uncertainty and the only one who's going to be crying will be
01:16the taxpayer because it means higher associated costs and likely wider bid
01:21offer spreads so it's really a choice for the Fed we're not crying because we
01:26need the forward guidance we are looking for a plan and we don't see one right now
01:31and that is what the long end of the rate curve is telling you
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