Fritz Followers Were Prescient: “Catching Up” On The Fed’s Mistake Hot

Remember way back to December 24, 2018? Seems like a long time ago?

It was a terrible day for stocks. The S&P 500 plunged 2.7% on a holiday-shortened Christmas Eve trading day that followed the worst week for Wall Street in seven years.

By the time of a hastily scheduled CE webinar led by Fritz Meyer on Wednesday, December 26, stocks had come back soaring, and A4A members were asked if the Fed had made a mistake -- whether it was a big mistake -- or if it was not a mistake at all. 

A majority of 57% A4A members at that Fritz Meyer webinar that day said the Fed indeed had made a mistake, with its decision on December 19 to hike rates a quarter-point.

Of the two thirds who said the Fed made a mistake, two-thirds of you qualified it as just a small mistake. A third said it was a big mistake. Just a third of advisors thought it was not a mistake. Two weeks later, the majority of Fritz Meyer attendees were proven correct: The Fed chair essentially admitted at the American Economic Association annual meeting last week that he had made mistake in not listening to the markets. 

Fritz was all over it. He nailed it! It’s probably why a majority of A4A attendees got this prediction right.

Personally, I did not buy it when Fritz initially told me on December 24th that the Fed was making mistake. The Fed’s dual mandate says nothing about listening to the markets.

However, On Friday, January 4, the Fed chair in an act of total transparency shared his intention to back off a hard line and shift policy materially. If you look at the video -- an I’ve studied it -- Jerome Powell, with about 3500 viewing live Web, says repeatedly he's listening and spells out exactly what he's thinking. He outright declares that Fed policy would be “Taking the market’s downside risks into account as we make policy moving forward.”

Catch up with all the news on A4A’s continuing ed news accredited webinars covering breaking news for financial professionals.