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When Fed Chair Janet Yellen talks, people listen. Except for California Congressman Brad Sherman (D) who said “God’s plan is not for things to rise in the autumn, that is why it is called fall. If you want to be good with The Almighty, you might want to delay until May.”
I think market participants are listening to Yellen rather than Brad Sherman.
(New York Times) — WASHINGTON — Janet L. Yellen, the Federal Reserve chairwoman, reiterated Wednesday that the Fed could raise its benchmark interest rate in December.
“It could be appropriate” to act at the Fed’s final policy-making meeting of the year, Ms. Yellen told the House Financial Services Committee. She said the economy was “performing well,” suggesting that if growth continued apace, the Fed was inclined to start raising interest rates. She added the cautionary note, however, that “no decision has been made.”
Investors responded to Ms. Yellen’s remarks by bidding up the yield on short-term Treasury securities, suggesting that markets view a rate increase as increasingly likely. Yields on the two-year Treasury rose to 0.83 percent immediately after Ms. Yellen’s remarks, and some measures showed that investors now placed the chances of an increase at almost two in three.
Yes, the 2 year Treasury yield jumped up on Yellen’s message.
As did the US Dollar / Euro cross jumped as well.
And the US stock market tumbled.
I thought for a second that Brad Sherman was going to break into Billy Preston’s “That’s The God Planned It.”
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I wanted to be
sure you saw these two tweets from Congressman Sherman to clarify his tongue in
cheek comments. He actually made the same joke when Yellen came to Congress in
July:
@BradSherman
Urged Janet Yellen not to raise interest rates now. http://youtu.be/jf4Bqq9xlos
God’s plan is things rise in spring, not winter.
@BradSherman
Don’t actually think God has an opinion on monetary policy, but if She did, She
would agree that the FOMC shouldn’t increase rates in winter