Here are my thoughts from yesterday’s Fed meeting:
My takeaway from her comments is that the Fed will continue to do everything in its power to support both Main Street and Wall Street. I highly doubt they are going to step back and let Main Street fall off another economic cliff if conditions worsen. Deep down, investors know this and that is why we saw the stock market rebound after the initial sell-off in the few minutes following her comment.
Short Term Outlook:
In the short term it will be very interesting to see where we close tomorrow and then where we close for the month and quarter. As of Wednesday’s close, the S&P 500 is up 12 points for the quarter and the year which is not a lot but healthy considering how strong it rallied last year.
Perception is Reality On Wall Street
Keep in mind, the only thing that matters in this business is what is actually happening (not what someone thinks should happen). So the fact that various markets around the world reacted the way they did implies that large investors were caught off guard (and or not pleased) by her comment. As always, perception is reality on Wall Street. This reinforces a lesson I learned many, many, years ago: How markets react to the news is a lot more important than the news itself.