Yellen Speaks – The Real Reason Behind The Upcoming Rate Hike
There are two incredibly important dynamics at play here.
- The stock market.
- The establishments attempt to bring down President Trump.
I have written about the latter a few days ago. You can see it here Will Janet Yellen Bring Donald Trump Down?
As of today, there is a 80% probability that the FED will hike interest rates at their March 15th gathering.
They will do so because of the run away stock market. I have said it before and I will say it again. The FED is very much aware of where we are today.
They know that they have caused a massive bubble in most asset classes with their zero interest rate policies and QE. Their only hope now is to keep the party going for as long as they can. To keep it somehow in balance.
At the same time, they don't want a run away bubble as bubbles tend to blow up. With that in mind, at Shiller's Adjusted S&P P/E Ratio of 29.35 one can argue that is exactly what we are seeing today.
If Janet Yellen fails to hike in March, to slow this market down, she risks a blow up scenario. Obviously that is the last thing she wants. She will continue to play both sides of the fence in her attempt to, somehow, keep this humpy dumpy together.
Unfortunately, the balancing act above is bound to fail. The only question is when.
If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here.