Related Topics
Economy , Interest Rates , Stocks

Does the Fed Really Know What It’s Doing?

“The media called its looming decision on whether to tweak its interest rate ’Historic and momentous.’”

by Bob Stokes
Updated: October 14, 2021

In his 2020 edition of Conquer the Crash, Robert Prechter says:

For many people, the single biggest financial shock and surprise over the next decade will be the revelation that the Fed has never really known what on earth it was doing.

This statement is already being confirmed by a surprising source: a staff economist for none other than the Fed itself.

Jeremy B. Rudd, an economist employed by the Fed, just published a paper in which he challenges long-held assumptions about inflation, changes in demand in relation to changes in prices and how the economy works in general.

An October 1 New York Times article delved into the Rudd paper and said:

A staff economist at the world's most powerful central bank went on to say, in effect, that his own employer has been focused on the wrong things for the last few decades.

Yet, many investors around the world cling to every word of a Fed policy statement.

However, the evidence strongly suggests that the Fed is largely irrelevant to the price behavior of the stock market.

Let's review a historic case-in-point from Robert Prechter's landmark book, The Socionomic Theory of Finance. Here's a chart and commentary:


[In December 2015], as the Fed's mid-month meeting approached, the media called its looming decision on whether to tweak its interest rate "Historic and momentous." ... Many reasons were given... A few hours later the Fed--historically and momentously--raised both its discount rate and its federal funds rate, by 1/4 point, for the first time in 9½ years. Yet nothing historic or momentous happened in stocks or any other financial market. At year's end, the major stock averages were quietly trading at the same levels they were the day before the announcement.

The broader point that The Socionomic Theory of Finance makes is that factors external to the market do not govern the market's price trend, whether it's Fed announcements, terrorist attacks, oil "shocks," political news -- even wars.

Get more insights into how financial markets really work by getting free access to the digital version of The Socionomic Theory of Finance ($99 value), which is offered with a 45-day subscription to our flagship investor package -- The Financial Forecast Service.

Follow the link below to get started.

The Next Financial Downturn: Why Wait to Prepare?

A "warning" only helps when you receive it beforehand.

Alas, in the financial world, most people wait until the first domino (or two) falls, before they act to protect themselves.

You know how fast dominoes fall.

And as too many investors actually decide what to do, the damage will continue to unfold.

Don't be like most investors.

Enjoy the financial confidence that comes with being prepared before the next inevitable financial downturn.

As Robert Prechter's landmark book, The Socionomic Theory of Finance, says:

How valuable is independence? In late 2008, we received an email from a subscriber saying, "The day the market had its biggest down day in points ever was one of the most serene days of my life." He had gotten out of stocks two years earlier, when signs of enthusiasm and overvaluation were legion; he acted rationally and independently; he did not herd. As a reward, he was financially safe ...

This all relates to the big message that is found in our Financial Forecast Service. Get that message via a 45-day subscription and you will enjoy free access to the digital version of The Socionomic Theory of Finance.

Follow the link below so you can prepare now.

Reset Your Thinking By Understanding True Market Dynamics
You start by receiving a copy of Robert Prechter's groundbreaking book, The Socionomic Theory of Finance. Thirteen years in the making, STF exposes layers of flawed assumptions and offers you a new approach. The book is jaw-dropping and, at times, an uncomfortable read. STF uses history to painstakingly challenge beliefs. It shows what actually happens in the markets. It does so fearlessly, taking on even the most sacred of assumptions. The book is acclaimed by academics, practitioners and investors alike as a landmark paradigm-setter. It comes in print and online editions and sells for $99. We include it free with your Financial Forecast Service bundle.

Stay Alert
Your next step is to be sure to stay alert, on the lookout for danger and opportunity. The Financial Forecast Service equips you to do this.

Elliott Wave International’s Financial Forecast Service

All month long, FFS shows you the patterns in U.S. stock indexes, bonds, gold, silver, the U.S. dollar, as well as market psychology and cultural trends. We show you where the trend is now, and when prices should turn -- specifically, we show the pattern at multiple degrees of trend, with precise risk/reward calculations. If you have fewer surprises, you can be better prepared.

Here’s how it works:



Subscribe now and read the current issues within FFS.



Fine-tune your portfolio plan.



Relax. Watch the markets with your targets in mind.

Your Financial Forecast Service Team Helps Put YOU in Control of the Market’s Trends and Turns

Your Financial Forecast Service guides -- three of the best-known market analysts in the world:

  1. 1. Robert Prechter, Author of 16 market-related books, New York Times Best-Selling Author and Editor of Elliott Wave Theorist
  2. 2. Steven Hochberg, Editor of the Short Term Update and Co-editor of The Elliott Wave Financial Forecast
  3. 3. Peter Kendall, Author of The Mania Chronicles and Co-editor of The Elliott Wave Financial Forecast

As featured in:

Here's what you get with the Financial Forecast Service

Every Month

At the end of each month, you get a 30-60 day look ahead at the markets. Elliott Wave Financial Forecast lays out expected trends and turns in stocks, gold, USD and bonds.

Three Days Per Week

At market close every Monday, Wednesday, and Friday, you get the Short Term Update, alerting you to what’s changed and what’s upcoming in the next several days.

Latest Research

Every month, Robert Prechter sends you his latest research about waves of social mood in the markets in the Elliott Wave Theorist, so you always know the full picture.

Get The Socionomic Theory of Finance FREE with your subscription to the Financial Forecast Service.

Waves of social mood affect every aspect of your life. They regulate the tone of politics, popular entertainment, the economy and the stock market. You can use these influences to your advantage. Society can't do it, but an individual can. You will learn to read the news in a completely different way. You may even start predicting the news. This book will open a whole new world to you. It is exciting, intellectually fulfilling, fun and practical. Many readers say it changed their lives. Find out why.

45 Days of the Financial Forecast Service
+ The Socionomic Theory of Finance

and save $59-$79

Get the digital or print version of this ground-breaking book plus 45 days of our flagship Financial Forecast Service for $145 or $165, respectively.

Choose Your FFS Bundle Format

I just want the $79 print book.

What the Luxury Sector Might Be Telling Us

Stock market rallies and a zealous pursuit of luxury go together. However, watch out when people begin to drastically cut back on pricey items. It could be a warning for stocks. Consider this shift in 2007.

Have You Seen This Chart About U.S. Job Openings?

Conventional wisdom today says the U.S. economy has too many jobs and too few workers. Now see the big-picture chart that stands the conventional "wisdom" on its head.


See the Action for Yourself: the Elliott Wave Pattern Unfolded as Forecast

Asian-Pacific Short Term Update subscribers were ready in April for the opportunities in May. See what we expect in major Asia markets in the month of June, and beyond.