The Fed increased its target short-term interest rate today to 0.75%, but that doesn't represent a tightening of monetary policy. It would be more correct to say that today monetary policy became slightly less accommodative. Neither the market nor the economy has anything to fear from today's Fed action. Financial markets today enjoy plentiful liquidity conditions, and confidence in general in rising. Interest rates have adjusted upwards slightly to reflect this. Remember: higher interest rates don't threaten growth; interest rates are higher because growth expectations are somewhat stronger. This is all good news. Today's modest decline in equity prices is more a buying opportunity than a warning sign.
Copiado de Calafia Beach Pundit.
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