The FED Freaks Out As Stocks Go Parabolic
Janet Yellen can say what she wants, but if the FED officials have even an ounce of intelligence, and I believe that they do, they must be worried.
Over the last few years their hidden agenda was to raise interest rates without impacting equity values too much. To create an environment of apparent stability, while reloading their “recession fighting” tool kit. The last thing they want or need at this juncture is the stock market bubble blowing up again.
Yet, that is precisely what they are getting now with the Trump rally going parabolic. In fact, it appears that the FED is starting to freak out.
The Federal Reserve should raise interest rates “sooner rather than later” to avoid having to step on the gas and push rates sharpy higher, said Dallas Fed President Rob Kaplan on Monday.
“It is my view that moving sooner rather than later will make it more likely that future removals of accommodation can be done gradually — that is, reduce the likelihood that the Fed will get ‘behind the curve’ and feel the need to remove accommodation more rapidly,” Kaplan said in a blog post.
A little too late?
That would be my assessment at this juncture. With stocks selling at their second highest valuation level in history, as per Shiller’s Adjusted S&P P/E ratio, it might be a little too late.