Market Direction Mid Week Update©

Market Direction: BULLISH alert issued 11/10/2016

Another quarter point rate hike by the Fed today

Scoff if you will but the Federal Reserve is as committed to the Phillips Curve as ever.

Fed Chairwoman Janet Yellen justified the Fed’s quarter-point rate hike on Wednesday by arguing that the strong (and getting stronger) labor market has created the conditions needed for an eventual acceleration in inflation.

Just wait, she said: in a few years, the Fed will have achieved its twin goals of maximum employment and stable prices.

It’s right there in the policy projections. Yellen’s colleagues are predicting that the unemployment rate will dip to 4.2% by 2019 while the annualized inflation rate speeds up to 2%.

And in the mean time, the Fed will have shrunk its balance sheet back to a “new normal” size.

In other words, the Fed will be able to victory.

Of course, the Fed has been terrible at predicting inflation in the past. But that’s where the Fed falls back on the theory that an economy that is employing all of its resources is susceptible to rising prices.

The Phillips Curve has shifted and drifted, bobbed and weaved, but the fundamental relationship between full employment and rising inflation remains in place, the Fed argues.

So when people say that the Fed shouldn’t be raising rates when inflation is so low, Yellen just shrugs and said: Just you wait. Inflation is right around the corner.

$tockMarketDirection proprietary model is currently BULLISH. We strongly encourage you to monitor positions closely, exercise proper money management strategies and follow us at  $tockMarketDirection for ALERTS we may issue advising a change in the current market direction. Stay tuned and follow us. If you have a testimonial or comment of how this website has helped you we would like to know, email us. Share with a friend.

The all-time highs since our initial recommendation to go LONG this market. Here is how the markets have performed:

Stock Market Direction Recommendation (11/10/2016)
Dow	up 2,584.09 points a 13.74% gain	6/14/17
Nasdaq	up 1,132.90 points a 21.75% gain	6/9/17
S&P 500	up 278.72 points a 12.86% gain	6/9/17

Related Link: http://www.stockmarket-direction.com/