Depending on the Federal Reserve to improve the stock market, is like circling the Arc de Triomphe.

On our recent family vacation, we rented a car in Paris to drive to Normandy. To get to the French countryside, we had to drive through the center of Paris. The first road we went on led to the Arc de Triomphe. The largest arch in the world, it is situated at Place Charles de Gaulle, historically known as the Place de l’Étoile (“Square of the Star”), which is a large road junction and meeting point of twelve straight avenues including the Champs-Élysées. This is not your average roundabout. Unlike the normal Florida roundabout that have maybe 4 exits, this road has 12!

The guide book that the car rental company provided had the following advice; “Unlike traditional roundabouts found in most places around the world, here in France you must give way to the cars which are entering the roundabout.”

Tips for driving on Place Charles de Gaulle (aka Place de l’Étoile):

  1. Always give way to your right and people entering the roundabout.
  2. Know what your insurance covers prior to driving in Paris.
  3. If you wish to avoid the roundabout all together take the last right before the intersection on to Rue de Presbourg and Rue de Tilsitt. This will circle around the outside of the roundabout however it is a lot slower.
  4. You need to be a little bit pushy in order to merge off the roundabout.
  5. Don’t make any sudden decisions, you need to stay calm and be fluid with the traffic around you. Continually check your blind spots as there are often erratic drivers in Paris and many scooters slicing between narrow gaps.
  6. Don’t be alarmed by the sound of a horn or two, Parisians use their horns a lot and many times it is not just a sign of road rage but a form of communication.

As you could imagine, most tour books also say the first place you must avoid in Paris

is the l’Étoile. I told Gina, just to close her eyes, and we proceeded to zigzag through hundreds of cars to find the 6th exit.

We survived and lived to visit Normandy.

In the moments after catching my breath driving through a big crazy circle, I thought is this how Chairman Powell of the Federal Reserve Feels? A little bit history of Powell and the Federal Reserve. On November 2, 2017, President Donald Trump nominated Powell to serve as the Chair of the Federal Reserve. On December 5, 2017, the Senate Banking Committee approved Powell’s nomination to be Chair in a 22-1 vote, with Senator Elizabeth Warren casting the lone dissenting vote. Powell assumed office as Chair on February 5, 2018.

President Trump subsequently complained about the Federal Reserve raising interest rates and in 2018 said in an interview with The Wall Street Journal that he “maybe” regretted nominating Powell, complaining that the Fed chairman “almost looks like he’s happy raising interest rates.” Powell has described the Fed’s role as nonpartisan and apolitical.

In June 2019, Trump criticized Powell, saying: “Here’s a guy, nobody ever heard of him before. And now, I made him, and he wants to show how tough he is … He’s not doing a good job.” Trump called the interest rate increase and the reduction of bond-buying quantitative easing “insane”.

The board of governors is a seven-member board , It is charged with the overseeing of the 12 District Reserve Banks and setting national monetary policy. It also supervises and regulates the U.S. banking system in general. Governors are appointed by the President of the United States and confirmed by the Senate for staggered 14-year terms. One term begins every two years, on February 1 of even-numbered years, and members serving a full term cannot be renominated for a second term, “Upon the expiration of their terms of office, members of the Board shall continue to serve until their successors are appointed and have qualified.” The law provides for the removal of a member of the board by the president “for cause”. The board is required to make an annual report of operations to the Speaker of the U.S. House of Representatives.

The chair and vice-chair of the board of governors are appointed by the president from among the sitting governors. They both serve a four-year term and they can be re-nominated as many times as the president chooses, until their terms on the board of governors expire.

Objectives of the Federal Reserve. The U.S. Congress established three key objectives for monetary policy in the Federal Reserve Act: maximizing employment, stabilizing prices, and moderating long-term interest rates. The first two objectives are sometimes referred to as the Federal Reserve’s dual mandate. Its duties have expanded over the years, and currently also include supervising and regulating banks, maintaining the stability of the financial system, and providing financial services to depository institutions, the U.S. government, and foreign official institutions. The Fed conducts research into the economy and provides numerous publications, such as the Beige Book and the FRED database.

Most people focus on the dual mandate of the Federal Reserve. The Fed is mostly known now for lowing rates and then raising them again in 2018 and President Trumps criticisms of Federal Reserve Chairman Powell’s handling of the rate rises in the end of 2018.

The Federal Reserve did ‘finally’ lower interest rates by a quarter point at the end of July 2019. This is the first rate cut by the Federal Reserve in 11 years. The decision to lower rates reminds me of the navigation through the Etoile. There are many cars entering. For example, Public Opinion, the Media, Inflation indicators, Job Reports, Presidential Criticism., and internal pressure from rest of the Federal Reserve committee, to name a few. So how does one navigate the crazy 12 entrace/ exit round-about, with lots of caution.

Hope you stay cool the rest of this summer.

Plan Today. Protect Tomorrow,


Peter Blatt

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