Knowledge Is Power

During the last week of the year, there was not a lot of activity on Wall Street.

The biggest challenge the Fed faces is psychology. What Chairman Powell and his colleagues fear the most is that inflationary expectations will become entrenched by households and businesses.

But since nobody knows when that is in advance, that just raises the probability of missing the start of the next bull market. Being nervous in tumultuous markets is just a symbol of being human. Responding with panic, however, is a sign of not having the right plan.