Investors often seem to be worried during the mid-pandemic earnings season. Can new variants of the virus knock on the market? Or did negative guidance from big American companies reset earnings forecasts?
Probably not. Treasury Secretary Janet Yellen’s unruly comment on Tuesday’s interest rates revealed what is stimulating market sentiment, except for almost everything else.
At the event with the Atlantic Ocean, Yellen said: Economy. “She specifically mentioned the Biden administration’s planned long-term spending, where the economy would probably be much closer to full employment.
Sure, the market was already depressed the day the Treasury’s comments were talked about, but such Anodyne’s remarks by someone familiar with the clear boundaries between the Federal Reserve and Treasury policies were shocking. .. Yellen later commented at the Wall Street Journal CEO Council Summit.
It doesn’t matter how the Fed reacts to economic recovery and the government’s bloated spending plans, but investors can seem to believe it. Chair Jerome Powell reiterated that the Fed intends to sit in its hands and deviate inflation by just over 2% without taking action to cool the economy.
Investors trust Powell a lot, but they are also cautious. As Bank of America investors’ primary concern, bond market turmoil or the potential for higher inflation has replaced pandemic-related risks.of
Monthly fund market research for the last two months.
Tips for deviating from the existing policies of the Federal Reserve will clearly continue to be seen by all sources as the greatest risk of already highly valuable stock market turmoil in all situations.
Write to Mike Bird at Mike.Bird@wsj.com
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Yellen’s interest rate comments show the biggest concern in the market
Source link Yellen’s interest rate comments show the biggest concern in the market