Are the markets in Animal Spirit Mode? Does anyone even care about the Federal Reserve Anymore?


Are the markets in Animal Spirit Mode? Does anyone even care about the Federal Reserve Anymore?



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  1. I disagree. I think the markets appreciate that the Fed stopped waffling and did the predictable thing, and what they said they were going to do. The past few years while the Fed has been dipping their toes on rate increases, I think the markets have been struggling to interpret the Fed’s intentions and what it means for their analysis of the economy, still fearing a return to recession. At this point, we’ve had steadily positive economic indicators for a couple years, and it’s fairly obvious that a rate raise is the correct move relative to inflation, and reflects the general consensus on how people see the state of the economy. Even if that could theoretically be a short term drag on equities, it is balanced out by the predictability and the affirmation of positive economic indicators. It’s more or less the same reaction they had to December’s rate raise. I don’t think it really has much at all to do with Trump or the emotional state of fund managers about the Trump presidency.

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