Edward Quince’s Wisdom Bites: Timeless Lessons For The Powell Rangers (and all of us)

Another FOMC day, another deluge of data, and another chorus of “experts” telling us exactly what the Fed did wrong, or right, or what they should do next. You know, the usual. While this blog famously believes that most of the daily financial commentary is “noise and false stimuli”, occasionally, amidst the cacophony, you stumble upon timeless wisdom. And who needs timeless wisdom more than the Federal Reserve, constantly navigating unexpected twists and turns? So, dear reader, grab your favorite beverage (mine’s a newly-tariffed tequila, if this blog’s GoFundMe ever takes off), and let's distill some enduring lessons for the FOMC, drawn from the wellspring of this very blog.

Here are 10 enduring and wise quotes that can serve as valuable advice to the Federal Reserve over time:

1. Independence is Paramount. Peter Stella nailed it: “I define central bank independence in one sentence, it's the ability to raise interest rates when the Treasury doesn't want you to. And the Treasury almost never wants you to, because of the cost of the debt.”. When politicians are clamoring for this or that, the Fed's ability to act without political interference is the bedrock of its credibility. Don't be swayed by the siren song of fiscal convenience.

2. Credibility Restores Stability. As Paul Volcker’s memoir reminds us, credibility is crucial "in restoring price stability and guarding against the ‘real danger [that] comes from encouraging or inadvertently tolerating rising inflation and its close cousin of extreme speculation and risk taking…'". It’s about building trust, which, like good wine, takes time.

3. Say Less, Imply More. Robert Greene’s Law 4: “Always Say Less Than Necessary: When you speak, always say as little as possible. The more you speak, the more likely you are to say something foolish.”. In a world of constant Fedspeak and interpretations, perhaps fewer words mean more impact. As the "wise old owl" knows, "The more he saw the less he spoke, The less he spoke, the more he heard".

4. Guard Your Reputation. Greene’s Law 5: “So Much Depends on Reputation – Guard It With your Life: Reputation is the cornerstone of power. You can influence more people and gain more opportunities with a solid reputation. Therefore, it is essential to protect it fiercely.”. The Fed’s power isn't just in its balance sheet, but in the trust it commands.

5. Actions Speak Louder. Greene’s Law 9: “Win through your Actions, Never through Argument: Actions demonstrate competence and create value, whereas words, often in arguments, lead to negative emotions and resentment.”. The market, and the economy, ultimately respond to policy actions, not carefully crafted press conference narratives or veiled threats about future moves.

6. Prevent Crises, Don't Just Cure Them. Charlie Munger's wisdom applies universally: “Nobody survives open heart surgery better than the guy who didn't need the procedure in the first place.”. This is a potent reminder for the Fed to act prudently and prevent economic conditions from deteriorating to a point where drastic, "surgical" interventions become unavoidable.

7. Plan for the Unexpected, Not the Predicted. As Dwight D. Eisenhower sagely put it: “Plans are worthless, but planning is everything…” because an emergency “is unexpected, therefore it is not going to happen the way you are planning.”. The future is inherently uncertain. Flexibility, not rigid forecasts, is the superpower.

8. Embrace Humility, Not Perfection. “It is impossible to be perfect: … The odds that the Fed can steer the economy to perfection by moving an interest rate both gives the Fed too much credit and creates an illusion that something as complex as the economy is that controllable.”. The economy is a beast, not a tightly controlled machine. Intellectual humility is a virtue.

9. Trust Observable Data, Not Blurry Guideposts. As one XTOD advises on r-star, it’s "advisable to guide policy decisions based more firmly on observed inflation rather than on highly uncertain estimates of the natural rate.”. When models and theories get too "blurry", perhaps it’s time to focus on what you can actually see and measure. Less star-gazing, more data-gazing.

10. Expect the Unexpected. This blog’s core philosophy: “The primary lesson is one of learning that the future is uncertain, expect the unexpected and that anything can happen.”. No amount of forecasting, political pressure, or market "vibes" can change the fundamental truth that the economic road is unmapped. Remain adaptive.

So, there you have it, folks. Ten timeless lessons that apply to the Fed, and frankly, to us all. In a world drowning in data, forecasts, and fleeting narratives, the real wisdom lies in subtraction, in discipline over drama, and in the humble acknowledgment that “Nobody knows anything, and that's okay.”. Because ultimately, “Your behavior matters more than your forecast.