Excuse me. Fed has been raising rates. But the stock market
is up 600 Dow pts. from the level (10,450) of the first interest rate hike back in June. As for inflation, have you
not read last Friday's PPI of minus .1 (core), or the previous employment report which showed hourly rising wages
up only .2? Down from up .5 the two consecutive months prior? FYI, when the FEd tightens, to the contrary of
prevailing belief, it is good for the markets. Remember in
1994 the Fed raised interest rates 6 times, from Fed Funds
3 3/4 to 6 1/4 by Feb. of 1995. After that, the Dow Jones
and Nasdaq made new highs; equities were up over 27% thaat year!
When the Fed is vigilant and erase inflation from the economic map, the value of the dollar goes up. Dollar denominated assets also go up. That is why in the last 3 years, there were little inflation, and the market was able to rise and to sustain the gains.
So why are you LOL? |
