What Will Janet Yellen Say – Hint – Nothing New
Over the last few years Janet Yellen has been the master of "Beating Around the Bush". Saying quite a bit, but without saying anything at all.
Will that continue today as she is set to deliver semiannual testimony to the Senate Banking Committee?
Most likely. Yet, one key issue will be on everyone's minds.
Will the FED be more hawkish.....possibly signalling increased probability of a March hike?
Considering today's economic and political environment, one can argue either case with the conviction of a lunatic.
Yet, we believe everyone has overlooked the primary concern here. Today's run away stock market. As we wrote yesterday.....The FED Freaks Out As Stocks Go Parabolic
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.
To quickly summarize all of the above, the FED might be terrified of today's stock market rally and its dizzying valuation levels. The last thing they want at this juncture is yet another stock market bubble blow up. And if the premise above is correct, Janet Yellen should appear a lot more hawkish at today's testimony.
Let's see if our hunch is correct.