Why Ken Fisher Doesn’t Try to Predict the Fed

In this video, veteran investor Ken Fisher addresses a question he says he has received throughout his decades-long career: why doesn't he forecast what the Federal Reserve will do? Fisher begins by invoking William McChesney Martin, the longest-serving Fed chair, who famously joked that upon taking office, one takes a pill that makes them forget everything they previously knew — and the effect lasts exactly as long as they hold the position. Fisher uses this anecdote to illustrate the inherent unpredictability of Fed leadership.

Fisher extends Martin's principle to the entire Federal Open Market Committee, a 12-member voting body whose members frequently disagree. He notes that even the Fed chair must act as a persuader and consensus-builder, making the collective body even harder to forecast. Fisher colorfully compares attempting to predict the FOMC to predicting the behavior of chimpanzees in a cage or a group of irrational people — asserting that the exercise is largely pointless.

As a self-described lifelong critic of the Fed spanning over 50 years, Fisher argues that the Fed makes wrong decisions more often than right ones, which compounds the difficulty of prediction. He also points out a recurring pattern: the Fed announces forward guidance about its intended actions, but external world events frequently cause it to reverse course on short notice, making prior predictions obsolete.

Fisher concludes by broadening the frame: he argues that investors should focus on the totality of global central bank activity rather than fixating on the Fed alone. While the Fed is important, so are other major central banks, and their collective behavior is what truly shapes global financial conditions.