In 2019, the Federal Reserve’s stimulus packages – which SHOCKED the markets, since they represented a full U-turn in terms of policy, compared to the aggressive tightening in 2018 – were one of the primary reasons that the stock market soared by so much.
Behind closed doors, FED Chair Jerome Powell has very different thoughts and holds quite contrasting points of view regarding how the Federal Reserve is handling monetary policy, from the ones he lets out to the media.
Gold started climbing in December 2015 (four years and one month ago) and is up 55%, since then. During this time, (1) the FED was tightening, (2) inflation was low, (3) the stock market SOARED, (4) the dollar was hitting ALL-TIME highs and other commodities didn’t participate in a rally.
“He’s a person who executes” – that’s my first response when asked what I think of President Trump. You may like him or hate him, but he is a most impactful man.
What a year; what a decade. In the past 10 years, the fallacy of the mainstream media has been that FED liquidity is the most determining factor in equity returns, but that’s only a small part of the bigger truth.