Legendary investor Stanley Druckenmiller: The Fed was wrong. They made a big mistake.

Legendary investor and market wizard Stanley Druckenmiller is on the wires saying that

• the Fed was wrong.
• They made a big mistake.

The markets are certainly in flux and the volatility is increasing.

Stanley Druckenmiller may be right. The Fed may have to reverse their current policy sooner rather than later.

The problem will then be one of credibility. The Fed and other central banks made their bed when rates were low and they insisted that they would remain low until inflation moved above 2% for an extended period of time. They took “extended period time” to an extreme and have been fighting to catch up since that error.

Now, the risk is that the Fed and other central banks are wrong again with their tightening policy and insistence that rates remain high for an extended period of time once again.

When you start to add fiscal policy in the picture (like the UK and the US for that matter as well) the waters get very muddy and the markets get very volatile.

I don’t know if that’s what the thesis is from Stanley Druckenmiller, but the water is very muddy and the markets are getting very volatile as a result of policy action.