MKM Partners’ Darda Says Fed Is Biggest Wild Card

The video discusses the Federal Reserve's plan to shrink its $4.5 trillion balance sheet and its potential impact on long-term interest rates. Michael Darda suggests that while the immediate effect might be higher rates, the long-term effects could include slower nominal growth and lower inflation. Historical examples from Japan and the ECB are used to illustrate how balance sheet changes have affected interest rates. The video also speculates on the future of Fed leadership, particularly Janet Yellen's role, and compares the balance sheets of the Fed, BOJ, and ECB.

What factors does Michael Darda believe may dominate over the long term regarding interest rates?

What are the potential long-term effects of the Fed starting to shrink its balance sheet?

How did the market react to the Fed's quantitative easing (QE) and the transition to QE off?

What scenario does Michael Darda suggest could lead to Janet Yellen remaining as Fed chair?

What lesson does the discussion provide regarding unwinding the balance sheet?