Playing with numbers, trying to view equity valuations through the lens of the modern Fed era.
Realtive to M2 it looks like we're in a Bear-Market-Rally even though indexes are at ATH.
It looks like we now live in a bizarro-world where equity prices in a Bear-Market go up while the money supply vastly outpaces productivity.
The Fed is now saying that they aren't going to try to manage near-term inflation and will instead target a longer-term "average" inflation value of 2%, allowing for higher rates in the near future to begin making up for the long period lower rates we've seen the past few decades.
This sounds to me like the Fed realizes that, thanks to their unlimited liquidity, inflation is coming and also that they realize they no longer have the ability to do anything about it; they're stating this change in strategy now as a preemptive excuse, hoping that it will keep markets from freaking out when the inevitable happens.
Anyone else have thoughts on this?
Realtive to M2 it looks like we're in a Bear-Market-Rally even though indexes are at ATH.
It looks like we now live in a bizarro-world where equity prices in a Bear-Market go up while the money supply vastly outpaces productivity.
The Fed is now saying that they aren't going to try to manage near-term inflation and will instead target a longer-term "average" inflation value of 2%, allowing for higher rates in the near future to begin making up for the long period lower rates we've seen the past few decades.
This sounds to me like the Fed realizes that, thanks to their unlimited liquidity, inflation is coming and also that they realize they no longer have the ability to do anything about it; they're stating this change in strategy now as a preemptive excuse, hoping that it will keep markets from freaking out when the inevitable happens.
Anyone else have thoughts on this?