People across the political spectrum have been quick to discuss the echo chamber feedback loop reverberating between a certain cable channel and the POTUS. We have long held the view that a more subtle, but just as dangerous, agreement loop has been promulgated by the Federal Reserve.

When Roger Ferguson was charged with charting the "openness" at the FOMC, a slow slog into the choir preach began. Today, the once admired tea-leaf reading skills of a "Fed Watcher" amount to little more than regurgitating the carefully developed script under the working title "Don't Worry, We Got This."

Balance sheet roll off, funding rate tweaks and SOMA/TBAC objectives are just micro-bumps in the Fed/Media echo canyon that, "There's nothing to see here, move along." A random volatility explosion? Like the lady with plaque psoriasis, "It's fine." A relentless year and half rise in term LIBOR sets? Pulease, what's LIBOR? Something stinks.

I started thinking about this like minded agreement society while running some rates through my model. Just wondering, if the wind down is so simple and without cause for concern, why has the FOMC elected to stay 2 hikes behind a neutral calibration? Looks to me like the non-public view at the FOMC is actually caution and concern.

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