When I was a child, one of the things I did a lot was to ask my mom for something, and if the answer I got wasn’t the one I wanted, I would immediately go and ask the same question of my dad. It was an attempt to divide between their replies so that I could ultimately get my desired outcome.

Experienced parents know this and, before answering their child, they inquire as to whether or not he has already asked the other parent.

I know that’s exactly what I’ll do in my house if that happens, but my parents weren’t like that at all.

They’d often debate the matter right in front of me, which is what made me lose credibility with them early on and strike out on my own.

You see, if the governing authority isn’t unified around a concise message, the governed feel discomfort and, even more importantly, a lack of confidence in leadership.

Right now, the FED’s board of governors is like that; they’re divided over the subject of hiking rates, compared to holding them where they are.

The markets are confused by this and that’s what makes this situation volatile.

You can see how soft and hard data are out of sync with each other!

What’s happening is that the Dallas FED president, Robert Kaplan, who is considered highly influential, believes we are going to see higher rates soon.

Unlike Powell, he isn’t afraid of telling it like it is.

“I’d rather start tapering, assuming we meet our conditions, sooner rather than later so that we have more flexibility in deciding what we want to do on rates down the road.”

What he’s saying is that he’s cautious of how heated-up things can get when full employment reaches maximum capacity, since the government needs to scale back its unemployment benefits soon.

Implied correlation is back to levels not seen since before this healthcare nightmare started, so the fact that we’re back to those levels tells me that euphoria has returned and I won’t be shocked to see a nice pullback for the major indices.

If that happens, we’ll follow our watch lists and I’ll keep you posted on exactly what I’m doing.

Volatility is coming. For the first time in many years, the FED’s governors are not a united front.