On the first of each month, I share reflections on the market in our private podcast. This enables me to tie together the various threads of our work and connect the dots between what I observe and hear during my travels and interactions with people. 

While many of you are podcast buffs, some prefer the magic of the written word. This is an edited transcript of the recording, without my typical writing flair. Here goes:  

Now that it has been three months since the last Fed rate hike, we can begin to contemplate what comes next. But first we need to assume the right analogy or starting point.

Rather than following in the footsteps of his revered predecessor, Paul Volcker, we believed Fed chairman Jerome Powell was emulating Alan Greenspan’s activist monetary policy approach from 1994. Let me remind you. 

Between February 1994 and February 1995, the Fed raised its benchmark short-term interest rate by three percentage points, from 3 percent to 6 percent, to slow the economy and forestall the risk of inflation. Officials thought they were “behind the curve.” 

Speaking to his colleagues, Greenspan also said that he supported higher interest rates because he “very consciously and purposely tried to break the bubble and upset the markets in order to break the cocoon of capital gains speculation.”

Individuals, for example, invested a record amount in stock and bond mutual funds in 1992 and 1993. Gross fund purchases totaled $876 billion in those two years, nearly equaling