U.S. Fed increases interest rates – due to the Trump factor?

Stunningly obvious – or obviously stunning – take your pick – personally I take the ‘stunningly obvious’ reason – as to why the U.S. Federal Reserve increased the interest rates by 0.25 percent.

In the press interview after the Fed decision – Blomberg correspondent asked of Janet Yellen the stunningly obvious question – as to what has changed between January 2017 to March 2017 that merits an interest rate increase – because ‘technically’ nothing has changed – or words to that effect.

Ms Yellen’s reply:-

So GDP is a pretty noisy indicator……. (Pregnant Pause for effect)…….If one averages through several quarters, I would describe our economy as one that has been growing around two percent per year. And as you can see from our projections, we — that’s something we expect to continue over the next couple of years.

Well stunningly obvious that was pure bullshit – not based on hard facts – but on ‘assumptions’.

In other words Janet Yellen was acknowledging the Trump Effect – under Obama nothing really happened that much – boring economic growth akin to watching fresh paint dry on the wall – but Trump – now that is something entirely different – Trump used ‘Jet Dry’ paint – and is already on his second coat – so we must tighten now – not in the future – we do not want to be accused of creating a stock market bubble.

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Well what else could it be?

Seems rather odd that nothing changes that much in an economic sense – and since Trump has won the Presidency – we have had two rate hikes.

Or does it?

Is Janet Yellen and the Federal Reserve Governors watching the stock market – tightening now to avoid a bubble? – or is it just the mere fact that one Donald Trump is the President.

Well stunningly obvious that it can only be the Stock Market – right?

Right – now watch for a correction in all stock markets over the coming months.

 

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