“And apparently the markets loved what he said. NASDAQ is up 2.4% this afternoon”
Nasdaq tech stocks are the stocks most dependent on interest rates. 2.8% (now) is a mild reaction so far. Nasdaq is usually the most volatile exchange.
Thanks for reminding me to watch the Bond Market reaction, which is the important one.
Also, this headline from MarketWatch:
“Inflation slows, Fed’s Beige Book finds, but recession worries grow”
Increased profits from inflation have finally shown up as well. It is all funny money but PE ratios are going down. The market does not have to go up for that but it usually does. One reason to invest in equities is a hedge against inflation. All that money that we are paying for stuff has to be going somewhere and not much is being shared with labor. Not after the stay at home bunch extorted wage increases to return to work after they had been paid the equivalent of $18 an hour tax free. A chunk of cost is probably going to increased profits.
Bonds will go up but held bonds will go down. Getting interest is nice unless it does not pace inflation, and it usually does not; if for no other reason than that you just get your money back. Not a fan of bonds, not a fan of being a lender, never was. It works well for banks because of fractional banking, very well. Not so much with retail lending in my experience unless it can be like the time I bought 20% bonds in like ‘83. I’d do it again if I had any money of course.