Mauldin June 18

Outside the Box is a free weekly economic e-letter by best-selling author and renowned fnancial expert,
John Mauldin. You can learn more and get your free subscription by visiting www.mauldineconomics.com
1
Musical Chairs at the FOMC
JOHN MAULDIN | June 18, 2014
You cant tell the players without a program. Get your program here! yelled the stadium vendors of
my youth. In todays Outside the Box I bring you an excellent piece of Fed watching by Nouriel Roubini
and colleagues, a program of the new Fed members and where they rank on the hawk-dove scale. Tey
point out that, with a new chairperson (Janet Yellen) and vice-chair (Stanley Fischer), and with higher
than normal turnover on the Federal Open Market Committee (FOMC) over the past year, 75% of the
FOMCs membership has changed the Feds need for clear communications with regard to monetary
policy and forward guidance is greater than ever.
And its not as though the Fed has wielded its powerful communication tool with perfect aplomb in recent
years. Last year at about this time, youll recall, we were in the midst of a frightful hullabaloo when the
Fed threatened to release upon the world the Dread Taper and then changed its mind. And then this
past March, just as everybody was learning to live with the Taper, Yellen went to the mike and attempted
to explain the Feds statement that the federal funds rate would remain near zero for a considerable time
afer QE ended. Tat meant interest-rate hikes could happen in about six months, she allowed and all
hell broke loose. Again.
And then theres this whole business of FOMC members speaking out of school. We didnt see much of
that during Greenspans reign, which our authors characterize as being close to an absolute monarchy,
but Bernanke took things in the direction of a collegial democracy and paid a price for being nice. Yellen
is similarly inclined indeed, as our authors note, she has been at pains to ensure that her expressed views
are close to those of the FOMC majority (which is decidedly dovish, yet not so dovish as Janet herself). So
we may be treated to further instances of regional Fed presidents popping their heads up here and there
around to the country to share their innermost feelings in the wake of ofcial FOMC statements.
I think youll agree that the following piece brings us up to speed about as painlessly as possible on all
things FOMC I enjoyed it, and I think you will too.
I have spent the last three days with Christian Menegatti, the managing director of Nouriels research frm.
We have been in nonstop meetings and presentations (and dinners!) with a wide variety of businessmen,
bankers, hedge fund managers, central bankers, government ofcials and ministers (even an of-the-record
talk with a person from the Vatican Bank). Quite the whirlwind. I will readily admit that Im surprised at
what I have learned. I brought the expectations from my reading and my previous numerous trips to Italy,
but I found out that things are now diferent here for the frst time in a VERY long time. Tis weeks letter,
which I will write in Dallas on Friday, will give you the details. For what its worth, Christian, who grew
up in Italy but has been in New York for the last 14 years (or so), was also surprised. We spent a lot of time
animatedly discussing what we learned and what it means for Europe and the world. Youll want to read
this one.
2
I spent nine hours on Sunday on a very aggressive walking tour of Rome. John Noronha is perhaps the
most knowledgeable and enthusiastic guide I have ever had on any tour anywhere. He is a polymath with
multiple technical and artistic and theological degrees, and he seemingly remembers everything he has
ever read. In the process of seeing the major tour sites, we stopped at this or that church that happened to
be on the way and that had a Raphael or a Caravaggio or two or three. Te art I saw on the day was better
than in all but a few museums I have ever visited. Billions of dollars worth of art and no guards. I was
actually allowed to touch a Michelangelo sculpture (what museum will allow you to do that?), and I swear
you could feel the bones and ligaments underneath the marble. I mean I could feel details that my eyes
could not see. I was in awe for the rest of the trip. We must have toured nine churches (We simply have
to stop to see this one!) and John knew every artifact in each of them. At a few points I actually tried to
stump him with a question about some arcane object, but he assumed I was truly interested and launched
into detail about the history of object afer object. As good as he was, he could not organize the weather,
and the rain came down in sheets at the Coliseum. But the double rainbow afer was a perfect end to an
exhausting but memorable day. (I think John doubles as a personal trainer.) If you are ever in Rome, you
should get him to be your guide and make him bring his wife to dinner. She teaches communications at
the Vatican. You can contact him at www.johnandashley.org.
And for those who asked, the website of the villa where we stayed in Tuscany is http://www.ifordalisi.
com/. It was my fourth time to go there and spend a few weeks. It is a perfect base to tour Tuscany and the
surrounding regions.
It is time to hit the send button. My fight back to Dallas will leave from Rome in a bit. Have a great week!
Your going to miss the food analyst,

John Mauldin, Editor
Outside the Box
Musical Chairs at the FOMC
By Nouriel Roubini, Sheryl King and Prajakta Bhide
Roubini Global Economics
May 29, 2014
Communication is one of the main tools at the Federal Reserves disposal in what will soon be
the post-QE, post-Evans rule era, making it critical to assess the Feds ability to deliver a coherent
monetary policy message. Even in normal years, the FOMC struggles to deliver a clear view about
the economic and policy outlook as its voting members rotate so frequently. Here, we analyze the
communication challenge presented by the signifcant turnover of FOMC members, exploring the
views of individual members and assessing the implications for core policy decisions.
3
Bottom line: While the mean FOMC voter is more hawkish this year than in 2013, the view of
the median FOMC voter more important for decisions has not changed much. However, there
is still some potential for market volatility induced by disparate and relatively unknown voices at
the Fed, particularly with regard to the new vice-chairman, Stanley Fischer. We believe that Fed
Chair Janet Yellen, a consensus-builder with a solid grasp of the Feds communication challenge,
will be largely able to counter individual hawkish noises. Still, delivering a clear forward guidance
message under these circumstances will be tricky during a critical period of policy normalization.
Ultimately, we believe Yellens dovish views will prevail, but Fed communication and forward
guidance may become less explicit.
Market implications: We do not expect a repeat of the bond-market gyrations experienced last
summer, when the Fed signaled the launch of QE tapering and then did not deliver, but increased
market volatility around Fed communication is a risk. As the central FOMC view is dovish, the
risks are skewed toward sudden jumps in Treasury yields and equity market sell-ofs on market
commentary from new Fed speakers, particularly Fischer and some of the new hawks in the
FOMC.
High FOMC Turnover Makes for Mixed Messages
In the post-Evans rule era, the Feds policy approach has returned to a more discretionary one, with no
clear explicit or implicit policy reaction function upon which markets can draw. In recent years, the Feds
communication strategy has been anchored by QE. But with QE set to end by Q4 2014, the Fed will no
longer possess this quantitative policy tool.
4
Until such time as the Fed decides to take a policy measure again (mostly likely to be a hike in the policy
rate), the policy stance will be one of watchful inaction, with the Fed and policy-watchers scanning
the incoming economic data for signs that higher policy rates are warranted. In this vacuum, the Fed
will rely heavily on communication, enhanced perhaps by a reverse repo facility and/or a term deposit
facility intended to keep short-term interest rates anchored. With so much riding on communication,
the potential costs of miscommunication are that much higher. (Te turmoil in fnancial markets last
summer when the Fed botched the taper signal, sparking a taper tantrum is a clear example of said
costs.) Once the frst policy rate hike occurs (perhaps sooner), the Fed will have to communicate to the
markets what its likely policy reaction function will be with regard to the speed and pace of policy rate
normalization.
In this context, the substantial churn in the composition of the FOMC of late merits close attention. Over
the past year, 75% of the FOMCs membership has changed more than twice the normal rate. With so
many new faces joining the committee, delivering clear policy and forward guidance will prove tricky
especially as the Fed exits QE and looks toward policy rate normalization. Fed Chair Yellen expressed
it best when she said that efective forward guidance ...depends critically on [the Feds] ability to shape
expectations of the future, specifcally by helping the public understand how it intends to conduct policy
over time, and what the likely implications of those actions will be for economic conditions.
Delivering the message in a clear and consistent manner is always difcult for monetary policy makers.
With a constantly changing roster of decision makers and varied views on how monetary policy should be
conducted to achieve policy goals, the message becomes all the more muddled. At least four FOMC voting
members, the Fed bank presidents, rotate on and of the board of governors every year, and governors on
the Fed board rarely serve a full 14-year term, meaning that even in normal years the FOMC is susceptible
to criticism regarding muddled messages.
Te rate of FOMC-member turnover has been particularly high over the past year, which has seen the
departure of three board members (Chairman Ben Bernanke, Sarah Raskin and Elisabeth Duke) and
Governor Jeremy Stein, along with the retirement of Cleveland Fed President Sandra Pianalto at the end of
May. As a result, three seats on the committee have changed in the past year, on top of the normal rotation
of four of 12 Fed bank presidents per year.
Te rotation in Fed presidents does not present too much uncertainty: Even non-voting members speak
to the public regularly, so their views on the economy, markets and monetary policy are well known.
However, the views of the other new FOMC members are much less familiar.
Te FOMC: Known Unknowns
Tere are two important factors to consider: First, the individual views of the new and prospective FOMC
members, which could tilt the FOMC in a more hawkish or dovish direction; second, the new rotations
potential infuence on the FOMCs decision-making core, led by Yellen.
Te question of who will succeed the departing FOMC members is only partly settled. Loretta Mester, a
long-time stafer (head of research and chief policy advisor to Charles Plosser) at the Philadelphia Fed,
takes the helm of the Cleveland Fed in June; and former Bank of Israel Governor Stanley Fischer has
been confrmed by the Senate to become Board vice-chairman. Lael Brainard, the under-secretary for
international afairs at the U.S. Treasury and a former senior member of the National Economic Council, is
a nominee for governor. She has yet to be confrmed, but is expected to be sometime in June.
5
Two more members of the board need to be nominated and confrmed to fll up the bodys seven positions.
Te Obama administration is likely to choose relative doves i.e., policy makers who care about both
infation and growth/unemployment and would likely vote in similar ways to the FOMCs current dovish
members. Among the names foated as probable candidates for the board are several distinguished
academics: Christina Romer and Alan Krueger (former heads of the Council of Economic Advisors, or
CEA, in the frst Obama administration) and Janice Eberly (formerly an ofcial at the U.S. Treasury). One
of the two open board slots is likely to go to a community banker; Yellen has expressed support for this
idea, which is popular in Congress. Traditionally, community bankers are dovish, and they tend to agree
with the views of the rest of the board members.
Starting this year, the profle of regional Fed presidents on the FOMC has become less dovish three new
relative hawks are in: Charles Plosser from the Philly Fed, Richard Fisher from the Dallas Fed and the
new Cleveland Fed head Loretta Mester, who used to be Plossers policy advisor at the Philly Fed; only
one hawk is out, namely Esther George from the Kansas City Fed. So, the mean FOMC voter is now more
hawkish than in 2013.
Fischer: Master of Activist Monetary Policy and Forward Guidance Doubter
Te new vice chairman, Stanley Fischer, was responsible for some of the earliest work on activist monetary
policy. While leading the Bank of Israel (BI), he aggressively lowered policy rates in early 2008 as the credit
markets went into meltdown and then had to reverse course soon afer with higher rates and massive
currency intervention as the shekel surged in response to the ensuing rapid economic recovery.
Fischer is uncontroversial when it comes to his views on the U.S. economy, which are mainstream. It
is his skeptical views on the efectiveness of forward guidance that set him apart, introducing a note of
uncertainty into the FOMC. He contends that forward guidance is not credible when the central bank
cannot efectively predict the future, and therefore a commitment to keep policy rates low for longer is not
very credible if it diverges from the policy reaction function of the central bank. For that reason, Fischer
has argued that providing guidance gives the central bank less fexibility when some state-contingent
discretion is necessary. Fischer downplayed these views before the Senate Banking Committee, but they
could very well remain valid in his mind. He is of the view that the Fed may have over-communicated its
policy intentions to the markets, a potentially counter-productive efort that may have made investors too
reliant on Fed signaling.
As Yellen is still a strong proponent of forward guidance and transparent communication, FOMC
meetings could prove lively as Yellen and Fischer have difering views about forward guidance. At worst,
any public comments Fischer may make on the subject could be seen as signaling friction within the
FOMC. Ultimately, however, we believe Yellens views will mostly prevail, but Fed communication and
forward guidance may become less explicit and direct.
Brainard: Likely to Align Well With Dovish Yellen
Brainards views on monetary policy are essentially unknown beyond her circumspect opening statement
on the subject during her appearance before the Senate Banking Committee. However, her work on
poverty and income disparity at the Brookings Institution suggests that she tilts toward dovishness and
is generally sympathetic to interventionist policies. Her stint as under-secretary for international afairs
at the U.S. Treasury indicates that she will bring a wealth of experience on global economic and market
issues.
6
Mester: Possibly Hawkish Like Plosser
Te monetary policy views of the new Cleveland Fed president, Loretta Mester, are also little known, but
we believe they are skewed toward the hawkish end of the spectrum. Since Mester retained her role under
Plosser, the hawkish Philly Fed president, it seems likely that her views align with his.
Her speeches on the economic outlook have not strayed far from the central tendency of Fed forecasts,
but a speech she gave last year reveals some reservations about forward guidance and macroprudential
policy tools. Mester pointed out that forward guidance may not work in practice since in the real world
there is no perfect commitment (a view shared by Fischer), although she acknowledged that QE played a
role in helping to bolster the Feds future commitments. She is even less convinced that monetary policy
has a role to play in fnancial stability, as it is difcult to see a bubble forming in advance. She argues that
macroprudential tools are in their infancy and it is difcult to calibrate the magnitude of policy needed to
assure fnancial stability. Finally, Mester discussed the Feds independence, pointing out that in the future,
the central bank may face political pressure to remain in accommodative mode; she also touched on the
political implications of a sensitive potential scenario in which the Fed is paying interest on excess reserves
to banks while making zero or net negative remittances to the Treasury from its balance sheet.
Nonetheless, having attended most FOMC meetings in her prior role as head of research at the Philly Fed,
Mester is well acquainted with the committees inner workings.
Te Fed Now Less of an Absolute Monarchy Tan Under Greenspan
Under Alan Greenspan, the FOMC was close to an absolute monarchy as the views of the chairman were
dominant and accepted by the rest of the committee. Under Ben Bernanke, the FOMC became a cross
between a constitutional monarchy and a collegial democracy, as the chairman had to work hard to ensure
that his views were shared by the majority of the FOMC. Tat required a constant dialogue between the
chairman and the rest of the Board to ensure that a majority of the FOMC would agree with the chairmans
views. Bernanke was frustrated by the cacophony of views expressed by FOMC members voting and
otherwise and he instituted press conferences in part to ensure that investors were clearly aware of the
FOMCs central view, despite the noise coming from speeches and public comments made by individual
FOMC members. Close interactions between board members at least ensured some coherence of views
within this group, but, even with the press conferences, the Fed cacophony never stopped as regional Fed
presidents continued to express publicly views that difered from the FOMC median.
Under Yellen, the Fed will remain as much of a constitutional monarchy (or possibly even a collegial
democracy) as it became under Bernanke. Yellen has a collegial personality and approach and will work
hard to ensure that she takes views close to those of the rest of the FOMC. For example, she has previously
expressed sympathy for the idea of optimal control i.e., allowing infation to increase above the Feds 2%
target to allow the unemployment rate to fall below the non-accelerating infation rate of unemployment
(NAIRU) for a while, thus allowing a faster reduction of labor-market slack generated by years of low
employment. But the idea of optimal control never garnered a majority within the FOMC, as there is a risk
that once infation rises above target, infation expectations would become unhinged. Tus, as Fed chair,
Yellen has already stopped supporting optimal control, a shif in stance from her days as vice-chair. She
also aligned herself with the rest of the FOMC in December before becoming chair by supporting the
start of QE tapering.
7
Te FOMC Still Has a Dovish Majority
Te Fed chair still wields signifcant power and is likely to have a board that remains relatively dovish:
indeed, under Bernanke, the board became more dovish over time and moved closer to Yellens views.
In spite of all the changes, the voting FOMC still has a majority of relative doves (Daniel Tarullo, Jerome
Powell, William Dudley and Narayana Kocherlakota, as well as Fischer and Brainard when confrmed)
who will align with Yellens views on the economy. Once the two additional board vacancies are flled by
Congress, this dovish majority will be reinforced.
In her April 16 speech to the Economic Club of New York, Yellen ofered a detailed explanation of the
central banks current thinking on forward guidance and policy rules, and set the groundwork for a
coherent forward guidance message. Coming afer her remark about a six-month lag between the end of
QE and the start of rate hikes, Yellens speech was a form of corrective action, highlighting the high degree
of labor-market slack and the weak infation outlook; the market correctly interpreted these signals as
dovish with respect to policy rates.
Fed Must Next Devise a New Policy Rule
With markets and investors now focusing on the date of the frst rate increase as the tapering schedule is
on track to be completed by October the key issue for the Fed will be to communicate to markets which
rule will be followed regarding the pace and end point of policy normalization once rate normalization
begins. With regard to the end point, the neutral long-term fed funds rate will be closer to 4% than the
higher levels (5.25% and 6.5%) seen during the last two cycles. A 4% neutral fed funds rate is consistent
with a 2% infation target and a 2% real fed funds rate. Historically, the equilibrium real fed funds rate was
higher (closer to 2.5-3%), but Fed ofcials have made several arguments for why the equilibrium real short
rate is now closer to 2% if not lower.
As recently argued by New York Fed President William Dudley, there are three reasons for a lower
equilibrium real fed funds rate. First, economic headwinds seem likely to persist for several more years.
Second, slower growth of the labor force and moderate productivity growth imply a lower potential real
GDP growth rate, which implies lower real equilibrium interest rates even once all current headwinds
have fully dissipated. Tird, changes in bank regulation may also imply a somewhat lower long-term
equilibrium rate. Higher capital requirements for banks imply somewhat wider intermediation margins,
which is likely to push down the long-term equilibrium federal funds rate somewhat.
Some very dovish FOMC members may believe that the equilibrium fed funds rate may be even lower
than 4% (a view that is currently priced in by fnancial markets), while some more hawkish members
believe that an equilibrium rate closer to the historical average of 4.5% is more warranted. Tis dispersion
of views is clear from the forecasts contained in the FOMCs Summary of Economic Projections (SEP). But
for the median FOMC voter, the new neutral rate is 4%, so it seems likely that this will be the neutral rate.
How fast will the Fed get to 4% and with which policy rule? Te median FOMC voter sees the fed funds
rate at 1% by the end of 2015 and 2.25% by the end of 2016, only reaching the neutral level of 4% toward
the end of 2018. Tis is an extremely slow pace of policy normalization, a process that would last about
3.5 years from start to fnish, assuming normalization does not begin until mid-2015. In the 2004-06
normalization cycle, the rate went from 1% to 5.25% in just two years.
8
Te need to use aggressive forward guidance low for longer relative to even a modifed Taylor rule to
make these SEP projections credible to markets is obvious: Since the median FOMC voter forecasts that
the unemployment rate will be close to NAIRU by the end of 2016 and that infation will be close to its 2%
target at that time, a fed funds rate of 2.25% by the end of 2016 implies that the real fed funds rate will still
be close to or barely above 0%, despite the economy being close to full employment and infation being
close to target. In normal times, such a scenario would have justifed a real fed funds rate closer to 1% and
therefore a nominal fed funds rate that is closer to 3% than 2.25%. And indeed, some analysts and market
participants believe that the Fed will normalize faster than the SEP dots (individual participants forecasts)
predict, with the fed funds rate close to 3% by the end of 2016.
Tis is why Fed communication and forward guidance are key. If those within the FOMC who are
skeptical of forward guidance (such as Fischer and the hawks) were to have the upper hand, it is likely that
markets would start pricing in a more rapid policy rate normalization closer to 3% by the end of 2016
and closer to the neutral rate of 4% by the end of 2017. If instead, the dovish view were to prevail, it would
be critical for the Fed to defend the credibility of its lower for longer message.
Tose skeptical of forward guidance would most likely prefer the Fed to communicate to markets a
policy rule closer to a Taylor rule with some discretion, rather than a policy rule based on strong forward
guidance. Terefore, the key issue ahead will be whether Yellen can convince the rest of the FOMC to
maintain the lower for longer forward guidance approach. While the median FOMC voter currently
adheres to the Yellen view, the situation may change for several reasons:
A. Te less dovish members may push to de-emphasize forward guidance and the SEP dots;
B. As uncertainty recedes about the end-2016 outlook for infation and labor-market conditions,
the policy reaction function of the median FOMC voter may change: that median FOMC voter may
decide that a near-0% real fed funds rate is too low and would thus choose to front-load the policy rate
normalization process toward 3% by the end of 2016;
C. Concerns about asset bubbles and fnancial stability may induce FOMC members to consider using
monetary policy to control bubbles, especially if macro-pru policies fail to contain current and future
frothiness in fnancial markets. While Yellen is wary of using monetary policy (policy rates) to control
bubbles, other FOMC members are more open to this option if macro-pru policies prove insufcient.
Terefore, for the FOMC to make its multi-indicator-based forward guidance approach work, we believe
that the members will need to follow Yellens lead and make a stronger and more cohesive efort to
communicate the FOMCs policies and views on the economy. If Yellen continues to communicate in this
manner, and is able to rally the overall signaling of the Feds stance around her views, then the Fed may
be able to temper the headwinds generated by the current absence of a more explicit policy framework. If
not, we would be concerned that a somewhat less dovish FOMC membership may have an impact on the
markets perception of the timing and speed of the Feds policy normalization and the degree to which the
Fed will continue with forward guidance in the future. Certainly, the Fed is now in the middle of a serious
debate on the nature of its policy reaction function once policy rates start to rise above 0%. Te result
of this debate will be key to assessing whether the pace of policy normalization currently priced in by
markets that is, close to the Feds SEP dots is correct or not.
9
Te Known Knowns
Although the market will have to adjust to a number of new Fed ofcials over the next year, the FOMCs
2014 and 2015 cohorts contain a number of familiar fgures. Below is a summary of their current views on
how monetary policy should evolve over the next few years.
New York Fed President William Dudley is a dove and a core member of the FOMC. In a speech on May
20, Dudley did not add color on the timing of the frst rate hike, but noted that the pace of tightening
thereafer will probably be relatively slow. Dudley expects that the fed funds rate consistent with a 2%
rate of long-run personal consumer expenditure (PCE) infation is likely to be well below the 4.25%
historical average that accompanied 2% infation. (With respect to the labor market, Dudley noted that he
believes a much greater proportion of long-term unemployment is the product of cyclical forces.) Dudley
is likely to align with Yellen in pressing to keep rates lower for longer.
San Francisco Fed President John C. Williams will be a 2015 voting member, and therefore likely to play
a role in the forward guidance debate in 2015. In a May 22 speech, Williams noted that a real tightening
of policy which would mean raising the fed funds rate is still a good way of. Although Williams is
dovish, he is a mild dove at best and may have views diverging from the lower for longer pledge; for
instance, Williams had seemed to be leaning in the direction of an expeditious retreat from QE last spring.
Dovish Atlanta Fed President Dennis Lockhart will be a voting member in 2015 and is likely to support
lower for longer forward guidance. In a May 11 speech, Lockhart said that the frst rate hike would likely
come in H2 2015, stating that When the frst move to tighten policy is taken, I would expect it to begin a
cycle of gradually rising rates. Lockhart sees both a shortfall from potential and below-objective infation
as justifying patience in raising policy rates.
Chicago Fed President Charles Evans is markedly dovish and a clear proponent of forward guidance. As a
2015 FOMC voting member, he will be strongly in favor of maintaining forward guidance to shore up the
recovery. In an April 9 speech, Evans observed that It certainly seems that the fallout from the fnancial
crisis and persistent headwinds holding back economic activity are consistent with the equilibrium real
interest rate being lower than usual today. In Evans view, the FOMCs March lower for longer pledge
accounts for the possibility of lower real rates.
Richmond Fed President Jefrey Lacker is generally hawkish, although he has not spoken recently
regarding the Feds March communication changes on interest rates. He votes in 2015, and may lean
against the forward guidance pledge.
Philadelphia Fed President Charles Plosser is a hawk and a member of the FOMC in 2014. In a May 20
speech, Plosser said that as we continue to move closer to our 2% infation goal and the labor market
improves, we must be prepared to adjust policy appropriately. Tat may well require us to begin raising
interest rates sooner rather than later. Plossers next voting term is in 2017, however, and therefore he will
infuence the debate (rather than the vote) on lower for longer.
Minneapolis Fed president Narayana Kocherlakota, a 2014 voting member, is a hawk turned noted dove.
In a May 21 speech, Kocherlakota stated that he currently saw the Fed as undershooting both its price
stability and maximum employment mandates. Kocherlakotas next voting term is also 2017 and therefore,
like Plosser, he will infuence the debate rather than the vote on lower for longer.
10
Finally, there is Dallas Fed President Richard Fisher, who is currently a member of the FOMC and also a
noted hawk. Fisher has never been a proponent of QE, long arguing that Fed asset purchases can lead to
excessive risk taking and the creation of market bubbles. As Fisher rotates of the Committee this year and
will not be a voting member again until 2017, his views will have less bearing on the timing and pace of
rate hikes over the next couple of years.
Copyright 2014 John Mauldin. All Rights Reserved.
Share Your Thoughts on This Article
Post a Comment
Like Outside the Box? Ten we think youll love Johns premium product, Over My Shoulder. Each week
John Mauldin sends his Over My Shoulder subscribers the most interesting items that he personally cherry
picks from the dozens of books, reports, and articles he reads each week as part of his research. Learn more
about Over My Shoulder
Outside the Box is a free weekly economic e-letter by best-selling author and renowned fnancial expert, John Mauldin. You can learn more and get
your free subscription by visiting http://www.mauldineconomics.com.
Please write to subscribers@mauldineconomics.com to inform us of any reproductions, including when and where copy will be reproduced. You must
keep the letter intact, from introduction to disclaimers. If you would like to quote brief portions only, please reference http://www.mauldineconomics.
com.
To subscribe to John Mauldins e-letter, please click here: http://www.mauldineconomics.com/subscribe/
To change your email address, please click here: http://www.mauldineconomics.com/change-address
If you would ALSO like changes applied to the Mauldin Circle e-letter, please include your old and new email address along with a note requesting the
change for both e-letters and send your request to compliance@2000wave.com.
To unsubscribe, please refer to the bottom of the email.
Outside the Box and JohnMauldin.com is not an offering for any investment. It represents only the opinions of John Mauldin and those that he
interviews. Any views expressed are provided for information purposes only and should not be construed in any way as an offer, an endorsement,
or inducement to invest and is not in any way a testimony of, or associated with, Mauldins other frms. John Mauldin is the Chairman of Mauldin
Economics, LLC. He also is the President of Millennium Wave Advisors, LLC (MWA) which is an investment advisory frm registered with multiple
states, President and registered representative of Millennium Wave Securities, LLC, (MWS) member FINRA, SIPC. MWS is also a Commodity Pool
Operator (CPO) and a Commodity Trading Advisor (CTA) registered with the CFTC, as well as an Introducing Broker (IB) and NFA Member. Millennium
Wave Investments is a dba of MWA LLC and MWS LLC. This message may contain information that is confdential or privileged and is intended only
for the individual or entity named above and does not constitute an offer for or advice about any alternative investment product. Such advice can only
be made when accompanied by a prospectus or similar offering document. Past performance is not indicative of future performance. Please make sure
to review important disclosures at the end of each article. Mauldin companies may have a marketing relationship with products and services mentioned
in this letter for a fee.
11
Note: Joining the Mauldin Circle is not an offering for any investment. It represents only the opinions of John Mauldin and Millennium Wave
Investments. It is intended solely for investors who have registered with Millennium Wave Investments and its partners at www.MauldinCircle.com
or directly related websites. The Mauldin Circle may send out material that is provided on a confdential basis, and subscribers to the Mauldin Circle
are not to send this letter to anyone other than their professional investment counselors. Investors should discuss any investment with their personal
investment counsel. John Mauldin is the President of Millennium Wave Advisors, LLC (MWA), which is an investment advisory frm registered with
multiple states. John Mauldin is a registered representative of Millennium Wave Securities, LLC, (MWS), an FINRA registered broker-dealer. MWS
is also a Commodity Pool Operator (CPO) and a Commodity Trading Advisor (CTA) registered with the CFTC, as well as an Introducing Broker (IB).
Millennium Wave Investments is a dba of MWA LLC and MWS LLC. Millennium Wave Investments cooperates in the consulting on and marketing of
private and non-private investment offerings with other independent frms such as Altegris Investments; Capital Management Group; Absolute Return
Partners, LLP; Fynn Capital; Nicola Wealth Management; and Plexus Asset Management. Investment offerings recommended by Mauldin may pay
a portion of their fees to these independent frms, who will share 1/3 of those fees with MWS and thus with Mauldin. Any views expressed herein are
provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest with any CTA,
fund, or program mentioned here or elsewhere. Before seeking any advisors services or making an investment in a fund, investors must read and
examine thoroughly the respective disclosure document or offering memorandum. Since these frms and Mauldin receive fees from the funds they
recommend/market, they only recommend/market products with which they have been able to negotiate fee arrangements.
PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN
WHEN INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE INVESTMENTS, INCLUDING HEDGE FUNDS, YOU SHOULD
CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS: OFTEN ENGAGE IN LEVERAGING AND OTHER SPECULATIVE
INVESTMENT PRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS, CAN BE ILLIQUID, ARE NOT REQUIRED TO PROVIDE
PERIODIC PRICING OR VALUATION INFORMATION TO INVESTORS, MAY INVOLVE COMPLEX TAX STRUCTURES AND DELAYS IN
DISTRIBUTING IMPORTANT TAX INFORMATION, ARE NOT SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS,
OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY
TO THE INVESTMENT MANAGER. Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or
her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single
advisor applying generally similar trading programs could mean lack of diversifcation and, consequently, higher risk. There is often no secondary
market for an investors interest in alternative investments, and none is expected to develop.
All material presented herein is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without
prior notice. John Mauldin and/or the staffs may or may not have investments in any funds cited above as well as economic interest. John Mauldin can
be reached at 800-829-7273.

Mauldin June 18

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Mauldin June 18

Uploaded by

Copyright:

Available Formats

Outside the Box is a free weekly economic e-letter by best-selling author and renowned fnancial expert,

You might also like