tastytrade logo
smiling frog

May 6, 2022

Frog Dissection

By:Josh Fabian


For the last couple weeks, if you had tuned into traditional financial media, all the talk was about earnings and the Fed. The earnings talk was akin to an eighth grade biology class dissecting a frog. In other words, the people doing the dissecting don’t really know what they’re talking about, at least not with respect to how it relates to markets. It was simply an attempt to place a narrative around why stocks were responding the way they were. Nothing more than a post-mortem. Then there was the Fed.

Each month we wait to hear what the Fed plans to do with respect to interest rates and monetary policy. Mark Haines, who we really liked, was a CNBC host that invented the Greenspan indicator. If Alan Greenspan went into a meeting with a briefcase, rates were going to change. No briefcase, no change. But just like today’s hosts, Mark missed the, eh, um, mark.

The reality of the situation is that the Fed does not lead when it comes to interest rate policy. There are currently four members on the Board of Governors with three additional seats vacant (that three seats are empty gives you an idea of how sought after those positions are). The bond market is a multi trillion dollar market with massive amounts of liquidity changing hands daily. Anyone thinking four people have more say over how that market trades than the market itself fails to understand the market.

Sure, we understand programs like quantitative easing did influence the market. But that was a unique situation where markets were not functioning well. We are clearly moving back toward a market without a crutch. And as we transition back, it is the market deciding on rates. By any number of various market indicators, a 50 basis increase in rates was a foregone conclusion.

In June the Fed will meet again. They will announce a decision on rates that was made for them by the market. But until then, media will speculate what’s to come. They’ll look at employment numbers, earnings, inflation and do what they do best, dissect frogs without really understanding what they’re looking at.

Written by Dylan Ratigan and Josh Fabian


Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Related Posts

tastytrade content is provided solely by tastytrade, Inc. (“tastytrade”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, transaction or investment strategy is suitable for any person. Trading securities can involve high risk and the loss of any funds invested. tastytrade, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors, and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastytrade is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparison, statistics, or other technical data, if applicable, will be supplied upon request. tastytrade is not a licensed financial advisor, registered investment advisor, or a registered broker-dealer. Options, futures and futures options are not suitable for all investors. Prior to trading securities products, please read the Characteristics and Risks of Standardized Options and the Risk Disclosure for Futures and Options found on tastyworks.com. 

tastytrade is a trademark/servicemark owned by tastytrade.

tastyworks, Inc. ("tastyworks") is a registered broker-dealer and member of FINRA, NFA and SIPC. tastyworks offers self-directed brokerage accounts to its customers. tastyworks does not give financial or trading advice nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastyworks’ systems, services or products. tastyworks is a wholly owned subsidiary of tastytrade, Inc (“tastytrade”).

tastyworks, Inc. (“tastyworks”) has entered into a Marketing Agreement with tastytrade (“Marketing Agent”) whereby tastyworks pays compensation to Marketing Agent to recommend tastyworks’ brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastyworks. tastytrade is the parent company of tastyworks. tastyworks and Marketing Agent are separate entities with their own products and services. tastytrade has different privacy policies than tastyworks.

Quiet Foundation, Inc. (“Quiet Foundation”) is a wholly-owned subsidiary of tastytrade The information on quietfoundation.com is intended for U.S. residents only. All investing involves the risk of loss. Past performance is not a guarantee of future results. Quiet Foundation does not make suitability determinations, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of Quiet Foundation’s systems, services or products.

© copyright 2013 – 2022 tastytrade. All Rights Reserved. Applicable portions of the Terms of use on tastytrade.com apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastytrade’s podcasts as necessary to view for personal use.