Shedding Light On Problems Facing The Fed

So exactly how far is the Fed going to go? Are they done? Perhaps another raise in August? Could that not even be enough? These are all questions of uncertainty that have the faces of investors looking more puzzled than ever over Fed policy. In my Friday letter I commented on how the Fed is concerned about inflation, and how it is still making them uncomfortable pegged in the high end of their range. In this week's "Outside the Box," Paul McCulley, to much surprise, confesses that he wears Austrian shoes (as in Austrian economics), and explains the risks to the markets of central banking policy.

A current Managing Director at fixed income powerhouse PIMCO, Paul is an intelligent thinker and economist who always provides an insightful perspective on the markets. He is a self-confessed "religious Keynesian" with respect to his views on monetary policy. In his July "Global Central Bank Focus," Paul discusses his thoughts on targeting asset prices and its affects on inflationary pressures.

I think you will find this piece helps shed some light on the problems facing the Fed and the reasons for the fog surrounding Fed policy.