Janet Says: Here’s Why The Market Is Going Up

janet yellen 2017

Fed Chair Janet Yellen testifying before Congress

Janet Yellen, Fed Chairwoman, has a pretty good handle on the economy.

And she has a theory about why the market is on a tear, which she shared this week during her testimony in front of the House Financial Services Committee.

It’s not really about the market fundamentals, she says, or what has already happened.

It’s more about what investors are anticipating will happen.

“I think market participants likely are anticipating shifts in fiscal policy that will stimulate growth and perhaps raise earnings,” Yellen said.

What Yellen is referring to are those pro-business policies President Trump has promise to unleash, including cutting individual and corporate taxes, loosening bank regulations, and increasing government spending.

Yellen’s interpretation is not that surprising. In fact, the stock market is normally viewed as an indicator or predictor of the economy, and tends to trend up (or down) months ahead of actual economic expansion or contraction.

About Mari Adam

Mari Adam, Certified Financial Planner™ and President of Adam Financial Associates Inc, has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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