Returning to this quiet thread following the recent roller-coaster, today the markets went blasting upwards, as the chart for the DJI shows:
That’s 2.5%. Still nowhere near it’s high, but still a respectable jump. So what happened?
CNN/Business suggests a reason:
Federal Reserve chairman Jerome Powell gave investors reason to cheer on Wednesday when he suggested that the Fed may slow down its interest rate hikes.
The Dow surged on the news, finishing the day with a gain of 618 points, or 2.5%. It was the fifth-biggest point jump for the Dow ever. The S&P 500 and Nasdaq each rose more than 2% as well.
Powell reassured investors that the Fed wouldn’t risk killing off economic growth by continuing to aggressively raise rates next year.
I heard similar reasoning on NPR tonight. But I have to wonder if there’s a bit more going on here. Remember that President Trump was yelling at the Fed a week or two ago?
….The United States should not be penalized because we are doing so well. Tightening now hurts all that we have done. The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates – Really?
— Donald J. Trump (@realDonaldTrump) July 20, 2018
Some might wonder if Powell is kow-towing to the President, but I doubt it. In the face of Trump’s persistent claims of credit when the markets are doing well, and marked lack of remarks when the markets collapse, I think Jerome just dropped his pants and showed Trump just who has the bigger penis.
Yeah, guys can be that way sometimes.
