Maybe Janet Yellen should run for president? She might get a bunch of votes from Wall Street traders.
The Nasdaq hit a new all-time high on Thursday. And the Dow and S&P 500 both moved into positive territory for the month, an impressive feat given that September is historically the worst month of the year for stocks.
Stocks popped Wednesday afternoon after the Fed held rates steady.
Fed chair Yellen, speaking at a press conference, seemed to suggest that a rate hike could be in the cards at the Fed’s December meeting. But further hikes in 2017 and 2018 may be gradual.
That is just what the market wanted to hear. Forget about the contentious presidential election, worries about Europe and China and more terrorism fears.
Investors are still obsessed with how fast Yellen will raise rates — and what other central banks around the world do too.
To that end, the Bank of Japan pleased investors around the globe Wednesday by pledging to keep long-term rates near zero for the foreseeable future.
So can stocks keep rallying? Investors are clearly in a more cheery mood now than they were earlier this month.
CNNMoney’s Fear & Greed Index, which tracks seven measures of market sentiment, is back in Greed territory. It was showing signs of Fear only a week ago.
I spoke with several investment strategists Thursday to get their thoughts on the Fed and the markets. I tweeted out some of their comments. (I call these rapid fire exchanges tweeterviews.) Here are some of the highlights.
Kate Warne, investment strategist for Edward Jones, thinks that Yellen said everything right. One might say she was more of a maestro than former Fed chair Alan Greenspan ever was.
Shannon Saccocia, head of asset allocation and portfolio strategy for Boston Private Wealth, added that investors need not fear that claims from Donald Trump about the Fed not being politically independent will influence its policy decisions.
She thinks there is zero chance the Fed will raise rates at its next meeting in November.
But not everyone is happy with Yellen’s performance.
David Lafferty, chief market strategist at Natixis Global Asset Management, worries that Yellen and other Fed members are spending too much time focused on the global financial markets and not the U.S. economy.
And Brian Nick, chief market strategist at TIAA Global Asset Management, is concerned that the Fed may be sending mixed messages.
Fed members may need to follow the advice that Aaron Burr gives Alexander Hamilton in the Tony/Grammy/Pulitzer award-winning musical. “Talk less. Smile more.”
Nick speaks from experience. He was a former market analyst at the New York Fed.
Saccocia agrees that the Fed may have created a problem for itself by talking too much.
At the end of the day, Warne said that either a President Trump or President Clinton would probably just leave the Fed alone.
There have been numerous times in the past few decades where the Commander-in-Chief and Rate Setter-in-Chief worked well together despite being from different political parties. There’s no reason for that to change.
Warne thinks that Yellen’s latest comments remove any fear that the Fed is going to drastically raise rates. If anything, the Fed could finally wind up getting the help it needs from the White House.
Both Clinton and Trump have talked more about trying to boost the economy through increased government spending and some tax reform.
So for now, the market seems to be viewing Trump and Clinton stimulus talk as good news when combined with the Fed’s pledge to not raise rates too quickly.
Or to quote the late Robin Williams in “Mrs. Doubtfire” — help is on the way!