Why the next chapter of options-income investing belongs to active management

The Fed Chair nominee, Kevin Warsh, has indicated he wants to shrink the size of the Fed’s balance sheet. Very few market participants understand that the size of the Fed’s net balance sheet is almost exclusively driven by the target fed funds rate. Specifically, the New York Fed conducts daily open market operations to maintain the Fed funds rate within the FOMC’s target range. Consequently, the Fed must maintain a net balance sheet consistent with the then current target Fed Funds rate. ...

We forecast economic growth of 2.5% this year even if the Strait of Hormuz is not reopened and reiterate our S&P 500 Index target of 8,000.