- Apr 12, 2011
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from: http://www.investors.com/politics/e...-really-a-bullish-validation-of-trumponomics/
Editorial 3/15/2017
Stocks are soaring and the reason is that Yellen's made it clear that the Fed's not raising rates any more. OK, so they're not raising 'em any less either but that's not the point.
Yeah, we all agree that Yellen's got a lot of short comings. She's a typical extreme left-wing loopy Princeton Democrat w/ politics to match. She's unable to lead and for years she's utterly failed to get a concenessus of policy opinion at the Federal Reserve. imho the only thing she's good for is monetary policy which I'll concede she does perfectly: we've had stable price growth well under control. Come to think of it, that's really what her job is all about.
So while her politics are dumb, she's got a super good understanding of what the Fed must do. Her control of interest rates (about the only thing the Fed can do) kept them as low as possible to prevent a replay of the serious deflation that hit at the end of '08. When things calmed down (it took years and years until 2015) she tried raising rates and she immoderately saw that the O economy was still on life support and the rate hikes stopped.
Until now. She won't say it, but she knows that since the election we now got a great economy.
Editorial 3/15/2017
...the Fed's decision to raise rates is a nothing-burger. It takes the benchmark fed funds rate only to the 0.75%-1.00% range, a level that is almost negligible compared to the past norm for interest rates. By way of comparison, from 1992 to 2017, a period of abnormally low interest rates, the fed funds averaged 2.74%.
And that may be the point.
Investors know that, with a change in the presidency, the economic future is likely to be much better than the recent slow-growth past, and they're putting their bets on the table now.
The Fed's measured, quarter-point hike is a signal that policymakers might have learned their lesson, and won't make the same foolish mistakes that they did in the recent past. That's why most market indexes on Wednesday closed near their highs for the day...
...the deregulated, low-tax Trump economy will grow, and grow fast. There are going to be more jobs. They fear that strains will emerge on labor and raw resources, pushing inflation above their 2% long-term target. And they're afraid of getting way behind the curve.
In short, the Obama era of slow growth is finally ending. Investors know that's not a bad thing. As long as the Fed doesn't push the growth-equals-inflation panic button and ratchet up interest rates, as it has in the past, the Trump economy's future should be very bright indeed.
And that may be the point.
Investors know that, with a change in the presidency, the economic future is likely to be much better than the recent slow-growth past, and they're putting their bets on the table now.
The Fed's measured, quarter-point hike is a signal that policymakers might have learned their lesson, and won't make the same foolish mistakes that they did in the recent past. That's why most market indexes on Wednesday closed near their highs for the day...
...the deregulated, low-tax Trump economy will grow, and grow fast. There are going to be more jobs. They fear that strains will emerge on labor and raw resources, pushing inflation above their 2% long-term target. And they're afraid of getting way behind the curve.
In short, the Obama era of slow growth is finally ending. Investors know that's not a bad thing. As long as the Fed doesn't push the growth-equals-inflation panic button and ratchet up interest rates, as it has in the past, the Trump economy's future should be very bright indeed.
* * * * * * * * * * * * * * * * * * * * * * * * * * * *
Stocks are soaring and the reason is that Yellen's made it clear that the Fed's not raising rates any more. OK, so they're not raising 'em any less either but that's not the point.
Yeah, we all agree that Yellen's got a lot of short comings. She's a typical extreme left-wing loopy Princeton Democrat w/ politics to match. She's unable to lead and for years she's utterly failed to get a concenessus of policy opinion at the Federal Reserve. imho the only thing she's good for is monetary policy which I'll concede she does perfectly: we've had stable price growth well under control. Come to think of it, that's really what her job is all about.
So while her politics are dumb, she's got a super good understanding of what the Fed must do. Her control of interest rates (about the only thing the Fed can do) kept them as low as possible to prevent a replay of the serious deflation that hit at the end of '08. When things calmed down (it took years and years until 2015) she tried raising rates and she immoderately saw that the O economy was still on life support and the rate hikes stopped.
Until now. She won't say it, but she knows that since the election we now got a great economy.
