The Fed's Illusionary Economic Influence

Ken Fisher, founder and co-chief investment officer of Fisher Investments, argues in this video that the Federal Reserve has less influence over the economy than commonly assumed. He contends that the Fed's adjustments to short-term interest rates do not produce a predictable or consistent economic effect, and that long-term rates are set by market forces largely outside the Fed's control. He attributes the persistence of this approach to what he calls "Martin's little pill," a phrase he credits to former Fed Chair William McChesney Martin.

1. Fisher says Fed changes to short-term rates do not have a predictable, consistent effect on the economy.
2. He points to long-term rates as being set by market forces largely outside the Fed's control.
3. He credits the phrase "Martin's little pill" to William McChesney Martin to explain why Fed chairs behave in similarly ineffective ways.