00:00 Speaker A
We’re here with more on the path for monetary policy and what it means for markets. Let’s welcome in now Infrastructure Capital Advisors CEO, Jay Hatfield. Jay, it is great to see you.
00:09 Speaker A
So, big Fed meeting on deck. We expect the cut. We know what the president thinks. He thinks they should have already been cutting, right? Too late Powell.
00:16 Speaker A
In fact, Jay, in fact, the president, my friend, he quotes you on truth so I saw this. He quotes you saying Powell was late to raise rates. So the president of the United States,
00:27 Speaker A
leader of the free world, Jay, he’s he’s listening to you and taking notes. How did that feel?
00:33 Jay Hatfield
Uh well, that was I thought pretty funny because he also quoted uh our comment that not believing in the money supply is like the Pope not believing in Jesus. So he put in even funny thing. And also he adds things because I didn’t call him too late either.
00:45 Jay Hatfield
I I’ve said worse things than that, but I don’t call him too late, but we’ve been critical.
00:49 Speaker A
There it is. There’s the there’s the post.
00:51 Jay Hatfield
Yeah. But we’ve been critical for four years, so it’s not like we’re not just doing this like a momentum political trade.
00:56 Jay Hatfield
The Fed is
00:57 Speaker A
Why are they too late, Jay in your opinion?
00:58 Jay Hatfield
Well, they have three terrible fundamental flaws. First is the 2% target is way too strict. They just completely made that up. should be two to three.
1:07 Speaker A
She should be a range.
1:08 Jay Hatfield
A range, of course, because um, well partly for the second reason, which is they use an index that’s two years behind. So the shelter component has owner’s equivalent rent that’s both they they purposely delayed it six months. It was just by law delayed six months. And then because they use renewing rents and this weird panel like they do for um, for the labor statistics, it’s behind.
1:30 Jay Hatfield
So, that’s uh terrible. And so they’re really just um and then finally they, you know, the Pope comment, they ignore the money supply. So they’re terrible forecasters of inflation. Most notably in early 21, we were projecting double digits and they were saying transitory because that money supply was up 70%.
1:44 Jay Hatfield
You can’t do that. If you could do that, then we wouldn’t have to have taxes. You just increase the money supply. But of course they do that in Argentina and Venezuela and they have 200% inflation. So, they’re really, really bad at their job and that’s why we’re not as focused on independence as we are on incompetence and getting a new regime in there to effectively execute monetary policy because most Americans don’t understand. That’s the most critical thing. If you blow that like you get the great financial crisis, you get the great inflation of 22.
2:07 Jay Hatfield
So it is the most important thing that drives the stock market. Everybody should be watching it. You should watch the money supply every Thursday when it comes out.
