Yellen did nothing. The USD went down. So did Stocks. There was nothing untoward in both reactions. Recently she had acknowledged Trump and said " the potential for changes in fiscal policy to affect the economic outlook and the appropriate policy path". Paul Ashworth wrote, "the FED won't want to commit itself to a more aggressive pace of interest rate hikes, particularly not when Inflation is still running slightly below its 2% target". Yellen will regret this Dithering. The FED is going to be behind the Curve. If we are not Already. If the wheels come off, Trump will tell her, "You're Fired".
It's Ground Hog Day, in Canada that's Wyerton Willie. 6 more weeks of Winter. 6 more weeks till the FED meeting on March 14th -15th. It's an active meeting. Will she go? She better! Surely given where Inflation is running currently, the range of +0.5% to +0.75% isn't appropriate. A Rate Hike should rally the USD. With that in prospect, we expect that yesterday's sell off is temporary. Ditto for Stocks.
Invest the Money.
Do you remember today in 1998? The S&P closed above 1,000 for the first time.
Edward Pennock CFA, Founding Partner