Excess Returns · Saturday, August 8, 2026
David Rosenberg expressed disagreement with the Federal Reserve hiking rates, despite indicators like the Taylor rule suggesting it. He believes the rule's assumptions are subject to guesswork, leading to significant deviations between the rule's recommendations and actual policy over decades.
“Well, I I don't think that, um, I don't think the Fed should be hiking rates. I understand the arguments as to why they should. I don't agree with them.”
“And, you know, the Taylor rule, and there's, as Rich said, there's dozens of different versions. They all have a lot of assumptions behind them, especially on the appropriate real interest rate and what measure of inflation expectations are you really using.”
“So there's lot of guesswork. It's not, uh, I wouldn't say there's any empirical, um, that's one of the reasons why for decades, there's been a huge deviation between where the funds rate is and where the Taylor rule is.”