Saturday 23 September 2017

The Fed secretly targets bearish market?

Although it is independent, the Fed may secretly want to cause a "bearish market", or a drop in stock markets, which is a hit in the back for the President Trump. Trump does not stop tweeting about the new index records that make Americans richer.
According to Peter Schiff, CEO of Euro Pacific Capital, Yellen's support for the markets may disappear during Trump's term.
"I do not know if the Fed has a lot of love for President Trump," Schiff said, adding that the Fed supported the stock markets during Obama's two mandates.
"Perhaps the Fed will be glad to see a bearish market, which is likely to fall on Trump," said Schiff, according to which the market can easily make a correction by 20%.
As one of the "black swans" that could initiate such a correction, Schiff points to a dent in the euphoria associated with the new president, who helped launch the indexes to new records.
With respect to the two consecutive quarters of growth in US companies with double digits, Schiff pointed to the difficulties in the profits of US retail chains.
Of course, all investor glances will be focused on consequences of Fed's decision, made this week and commentary on the Federal Reserve regarding its future policy. The latter will most likely have a strong impact on the financial markets and will give more clarity to investors, what to expect in the months to the end of the year.


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