"Sometimes You Need A Little Finesse..."

[Teach]

"Sometimes you need a little finesse,” I said to my playing partner.

Years ago, my history department head, a man named Jack, and I would occasionally get together for a round of golf.

As I recall, on one occasion, Jack had a particularly tricky shot. He was in the short rough, yet only about fifteen feet from the hole. It required a delicate shot. In lining up his shot, Jack's first decision: Do I putt it or do I chip it? Then there was the possibility, in either event, that if he weren’t careful, the ball would roll on past the pin putting him farther away from the hole than when he started.

I see my department head’s predicament on the golf course, in a manner of speaking, to be similar to what The Fed will need to decide upon in their open market committee meeting coming up in a few weeks on May 2-3.

Moreover, in the past, Chairman Powell has stated that a good deal of Fed decision-making is “data-driven.”

In that light, this morning at 8:30 a.m. EDT, we get the all-important March CPI numbers. Tomorrow, Thursday, we get the PPI numbers.

Further, I’m sure many of us we be waiting with baited breath as CNBC’s Rick Santelli reports from the CBT. Those CPI numbers, today, and the PPI numbers, tomorrow, could go a long way in determining what the Fed does three-weeks hence. The two Fed alternatives appear to be: “stand pat” or raise by 25 bps.

Moreover, The Fed’s decision-making, in my opinion, is as delicate as that 15-footer that my history department, golfing-partner, Jack, had many years ago, though, quite obviously, the Fed's decision is, comparatively, infinitely more significant.

In continuing, there are so many factors out there. Not the least of which is the overhanging banking issue (Remember when we were told that inflation was “ transient.”). I ask, "Will a 25 bps increase put some banks 'over the edge?’” Yet, if the Fed does nothing, will inflation become even more entrenched?

Furthermore, matters become more complicated when you consider international affairs that could have a bearing on domestic issues.

Those leaked documents. How devastating! Will other countries trust us? A lot of diplomacy goes on behind the scenes.

Tangentially, I wasn’t aware we had “boots on the ground” in Ukraine, as do some NATO countries, i.e., United Kingdom. I was aware of Russia’s mercenaries, i.e., Wagner Group, but our own involvement. I thought we served strictly as a supplier of arms.

Yes, this morning’s and tomorrow morning’s data should go a long way in influencing Fed decision-making. Whatever the Fed eventually decides, there are most definitely serious considerations that go along with either choice.

Finally, as for my golfing buddy, my department head, Jack, he first had to decide between a putter or a wedge. He decided on his putter. I recall that he “plumb-bobbed” before he approached his shot. Jack would ever-so-delicately tap the ball (hardly touched it). It rolled onto the green and ended up about 5-feet past. I recall he putted in for his par-4.

In closing, as that decades-old shampoo commercial suggested, be it for my playing partner, Jack, years ago, or currently, as it applies to Chairman Powell and the Federal Reserve Board: “Sometimes you need a little finesse, sometimes you need a lot."