US. The Fed’s pension fund is flashing a warning sign about the Trump trade
Federal Reserve Chair Janet Yellen went out of her way during her March press conference to emphasize the central bank’s decision to raise interest rates by a quarter percentage point was predicated on past economic performance, not extrapolations about future policy from the administration of President Donald Trump.
“The basis for today’s decision is simply our assessment of the progress of the economy against our long-established goals of maximum employment and price stability,” Yellen told reporters on March 15. “There’s nothing that we have done or anticipate that is a speculation.”
In that light, policymakers are already expressing some trepidation that the failure of Trump’s healthcare bill could compromise the rest of the president’s agenda, potentially throwing some cold water on some of the stock market’s recent optimism about the president’s pledges to cut taxes and slash regulations.
Stock prices jumped more than 10% in the months after the election, while yields on the 10-year Treasury note climbed as high as 2.64% before retreating to 2.40%. Bond yields move opposite to their price, and Treasurys are seen as a safe-haven investment for those who are averse to risk.
Full Content: Business Insider
