Hey, POTUS, Fire The Entire FOMC, Part 3

The screeching in behalf of an “independent” Fed versus one purportedly stacked and dominated by the Donald continues unabated. It seems that the talking heads on CNBC can’t gum about much else.

Alas, this barrage of self-interested humbug from Wall Street and Washington alike amounts to obsessing about the wrong question. As we have suggested in Parts 1 & 2, the question is not whether Jay Powell and the FOMC should be setting interest rates versus Donald Trump and his minions. To the contrary, the real issue is why anyone in the Eccles Building should be setting interest rates at all.

To wit, what in the hell is wrong with the free market? And by that we mean the tens of thousands, if not millions, of traders and investors with skin in the game who would otherwise set interest rates by bid and ask without any guidance and pegging from what amounts to a monetary politburo—even as the latter is pleased to be known by the utterly false and antiseptic title as the Federal Open Market Committee (FOMC).