Focus on the Money, Not Rates. The bottom line is that monetary policy is still very loose and likely to stay that way. And investors need to follow the money: both M2 overall and the money the banks are getting from the Fed. For now, neither are bearish signs.

What the Feds "Should" Do. There is a time and place for gradualism in monetary policy, particularly when the unemployment rate is still above normal or when inflation is only a little above the Fed's long-term target. This is not that time and place.

Rate Hikes Finally on the Way. The best reason to implement a larger Quantitative Tightening is that the Fed needs to counteract the excessive growth in the M2 measure of the money supply that is the root cause of higher inflation.