My third concern—and others have touched on it as well—is the problems of exiting from a near $4 trillion balance sheet.

Meanwhile, we look like we are blowing a fixed-income duration bubble right across the credit spectrum that will result in big losses when rates come up down the road. You can almost say that that is our strategy.

The way I read Yellen today is the way I read Bernanke in 2006 – as saying in effect, we are going to hike rates irrespective of how flat the yield curve gets. Is this how incoming Chair Jay Powell sees things? If so, the market is going to be very surprised and short-dated Treasuries are not going to be where you want to overweight. And let’s remember, Bernanke ultimately proved wrong on this one because we soon had a downturn, just as the yield curve was signalling we would.