The Next Step for Central Banks

Published on
July 8th, 2019
13 minutes

The Next Step for Central Banks

Trade Ideas ·
Featuring Max Wolff

Published on: July 8th, 2019 • Duration: 13 minutes

Max Wolff, co-founder of Multivariate, explores the potential knock-on effects of the Fed's next policy decision at their upcoming FOMC meeting in late July. In this interview with Jake Merl, he discusses the importance of an independent Fed, notes the impact of Christine Lagarde taking over the ECB, and considers playing the current situation with a currency trade of the euro. Filmed on July 3, 2019.



  • PU
    Peter U.
    8 July 2019 @ 09:58
    If you believe Central Banks are independent, I have some land to sell you in the Florida Everglades! What a joke Max . . . I didn't believe you are so gullible on this topic. The government created the quasi public private entity. It's members are appointed by the President and approved by Congress. What have CBers been doing since Nixon set them free . . .Credit cycles have been generally worsening, at least since the inflationary crisis of the 1970s, which followed the abandonment of the Bretton Woods Agreement in 1971. Central banks have debauched their currencies increasingly over successive credit cycles, building up to an inevitable apocalyptic crash. Central banks have been THE ENABLERS! They permit politicians to promise goodies for votes! They permit the perpetuation of poor governance by allowing politicians to spend what the country doesn't have in its coffers, all along spewing garbage like a 2% inflation target is good (yea good for the government as it decreases the real cost of debt repayment while raping the coffers of middle class savers!). Get a f grip on reality please.
    • DS
      David S.
      8 July 2019 @ 19:06
      I agree with most, but I think Congress and the administration – either party - are the drivers. The Fed must accommodate; ergo, no independence. Elimination of the gold standard took the handcuffs off Congress and the administration. If Congress had any fiscal discipline the Fed would not have to print ad nauseum. Congressional fiscal discipline also includes supporting the supervision of the markets and banks so that leverage does not skyrocket causing market meltdowns. Spending by Congress, the administration and excess leverage seem to be the culprits to me. DLS
    • AB
      Anne-Marie B.
      15 July 2019 @ 01:50
      I'm not really sure that is what he is saying, Peter. Your argument is at a much higher level than where he was coming from. I could certainly be wrong here but I suspect his context was from a face value perspective ... not the machinations of Central Banks
  • AB
    Anne-Marie B.
    15 July 2019 @ 01:47
    What a very nice concise and well-defined assessment here from Max!
  • DR
    Daniel R.
    11 July 2019 @ 01:50
    Odd, you don’t like the lack of independence of Shelton but applaud the lack of independence of Lagarde? Huh?
  • RK
    Robert K.
    8 July 2019 @ 18:28
    ? less cuts imply weaker dollar ? does not make much sense honestly. Could argue that the recent strength of the dollar comes from exactly that factor - a significant interest rate differential agains EUR.
    • RK
      Robert K.
      8 July 2019 @ 18:31
      That said - of course I can see an EUR rally based on a risk-on mood induced by overall dovish FED talk. I am almost adapted to trade bullshit narratives that markets nowadays seem to follow. Good interview! Thanks.
    • RS
      Ryan S.
      9 July 2019 @ 02:08
      Was wondering the same thing after watching the clip. Fail to see how less rate cuts/weakening global economy/general risk-off sentiment is bearish for USD
  • DS
    David S.
    8 July 2019 @ 21:02
    Is it consistent for Judy Shelton to want to lower interest rates and return to the gold standard? I know to be confirmed she does not need to be consistent, but what is her real agenda? I also read that she wants to drive the Fed funds rate to the zero bound to boost the economy – maybe for 2020. Is she just pandering to get on the Fed? DLS
  • JM
    Jason M.
    8 July 2019 @ 11:47
    Europe has a future potential fiscal stimulus, US spent that bullet.
  • SS
    Shanthi S.
    8 July 2019 @ 09:19
    Great! Thank you!