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The Fed FOMC Meeting and the Illusion of Asymmetric Insight Thumbnail

The Fed FOMC Meeting and the Illusion of Asymmetric Insight

The Federal Open Market Committee (FOMC), which sets U.S. monetary policy by adjusting interest rates, unanimously voted to keep the fed funds rate in the 4.25%–4.5% range in March. The most notable change in the post-meeting statement was the addition of a new clause:

“Uncertainty around the economic outlook has increased.”

But, does uncertainty really increase or decrease?

Are we ever more certain of an unknowable future?

Uncertainty, by definition, is always present when dealing with the future—especially in markets and macroeconomics.

What changes is our perception of uncertainty, not uncertainty itself. The FOMC’s statement acknowledges this shifting perception, but the underlying reality is that the future remains unknowable.

Markets, investors, and policymakers operate with incomplete information. We form expectations based on available data, but those expectations are always subject to surprises—whether from inflation shocks, geopolitical events, policy shifts, or unexpected economic downturns. When new risks emerge or prior assumptions are questioned, the perceived level of uncertainty rises, but that doesn’t mean uncertainty itself has increased—only that we are now more aware of its presence.

The Illusion of Asymmetric Insight 

 The idea that we ever become more certain about an unknowable future could be an example of the illusion of asymmetric insight—the cognitive bias where people believe they understand a situation, market, or economy better than others while underestimating how much uncertainty still exists.

Market participants and policymakers often convince themselves that they have greater clarity about future events based on new data, models, or patterns. But in reality, they are just refining their narratives, not reducing actual uncertainty. This illusion can lead to overconfidence in forecasts, rigid positioning, and mispricing of risk—until a shock exposes the limits of their perceived knowledge.

The FOMC’s statement that “uncertainty has increased” is more of a shift in perception than a fundamental change in the unknowable nature of the future. Uncertainty is always there; what changes is our awareness and acknowledgment of it.

The question cuts to the core of market behavior: Are we ever truly more certain of an unknowable future?

The answer is no.

Certainty is an illusion built on patterns and probabilities.

We can only attempt to structure trades, portfolios, and risk in a way that acknowledges the ever-present nature of uncertainty—hence the need for asymmetric positioning, predefined risk, and adapting to changing price trends, momentum, and volatility.