A simpler explanation, my theory, and the theory that best meets Occam’s Razor is the Fed has no idea what it is doing. All the talk of inflation expectations, consumer confidence, regional diffusion indexes, and other useless theories and measures provides strong supporting evidence.
The Fed is oblivious to bubbles other than they may possibly form sometime in the future. It’s too late to worry about that now. The bubbles are here, massive, and obvious.
The Fed has a 100% track record or never predicting a recession as well as a 100% track record of not seeing massive bubbles.
"Rethinking The Fed: Sowing The Seeds Of Financial Destruction." By Mike Shedlock, Zero Hedge, 7/7/17.