In this week’s Dividend Cafe, we explore the question of, “Well, does it matter?” And to understand if it matters or not what the Fed does, we may want to understand what they do, exactly.
Today's Post - https://bahnsen.co/47Xsqk9
The Federal Open Market Committee of the Federal Reserve met this week for their scheduled meeting and announced that … wait for it … they were not doing anything with interest rates. The market knew this was coming – futures have had a 100% chance of no increase or decrease in the Fed Funds rate at the January meeting for months – but markets went down -300 points after Fed chair, Jerome Powell, gave his customary press conference. The bond market went way up as yields dropped. And sure enough stocks caught up to bonds the very next day as the Dow jumped +370 points.
Maybe this sounds to you like a lot of drama for one or two market days when everyone already knew what was going to happen, and you would be right. But the question that many are asking is – if it doesn’t matter, why does it matter? In other words, why is market volatility so high and press attention so high about when the Fed will begin cutting rates? Maybe traders do dumb and speculative things but why do traders care about this so much? Why not focus on more important short term betting odds, like whether or not Travis and Taylor are going to get married?
In this week’s Dividend Cafe we explore the question of, “well, does it matter?” And to understand if it matters or not what the Fed does, we may want to understand what they do, exactly.
This is a good one. So jump on in to the Dividend Cafe.
Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com
David is the Founder, Managing Partner, and the Chief Investment Officer of The Bahnsen Group.
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