Monthly Archives: December 2015

Macro Focus – ZIRP, The End of an Era: Part II

Fri, DEC 4th, 2015

I have written before on the chances of a Federal Reserve rate hike in December. Today’s strong November jobs report – with positive September and October revisions – renders the probability of a hike at the FOMC’s next meeting (Dec. 15-16) from near certain to certain. In addition, I have previously opined that despite the intransigent suppositions from critics and complainers that extraordinary monetary policy was hurting this country and posed great financial risks, the facts simply didn’t bear this out. Quite the contrary. Ben Bernanke, Janet Yellen, the entire FOMC and Federal Reserve system staff were bold, blatant, and brilliant (see here and here for perspective). The screenshot below from Business Insider’s home page this morning captures these views perfectly.

Financial markets are ready for the first rate hike; the Fed did a masterful job setting the table. Throughout 2015 it’s been clear that this was the year the Fed hoped to get off of 0% crisis-level interest rate policy. Say goodbye to the days when constant and inordinate hand-wringing by markets over when the Fed will raise rates, and hello to the new parlor game: Attempting to forecast both the pace and span of the interest rate up-cycle.

Earlier this week Janet Yellen said, “When the Committee begins to normalize the stance of policy, doing so will be a testament, also, to how far our economy has come in recovering from the effects of the financial crisis and the Great Recession.”

Indeed, Madam Chair.


Jason L. Ware, MBA / Chief Investment Officer
Albion Financial Group
(801) 487-3700