Thursday, March 17, 2016

Dow Turns Positive for the Year

The Dow Jones Industrial Average is now in positive territory for 2016. Below is DJIA activity since the Federal Reserve raised interest rates in December 2016.

So much for the idea that the rate hike was going to crush the economy and stock market, and cause the Fed to reverse the rate hike.

We are in the early stages of a multi-year increase in interest rates. The idea that we are headed in the US for negative rates anytime soon is a view that can only be held by those who do not understand the nature of the Federal Reserve and what they can and can not do within a given economic environment.



  1. Robert - you have been writing persuasive posts for your pointvof view but it is not clear why you occasional use the stock market as support.

    For one, the markets are still a ways below their highs set over a year ago. Secondly, the market rallied this week because the Fed was DOVISH this week. Ergo the market rallied due to easy money speak from the Fed, not due to robust economic activity.

    1. Good comment, but my view is not that the rally is because the Fed did not raise rates. I regularly point out in the EPJ Daily Alert that what must be watched is reaction to the news, not the news itself. Remember, back in September the Fed didn't raise rates and the market sold off allegedly because the Fed was "concerned" about the economy? Don't get suckered in by MSM explanations for why markets do things. If this was a weak market it would have sold-off because of the Fed "concern."

      AS far as the rally today to a 2016 high, I am simply pointing out the inaccurate forecast of the Austrian-lites who said the market and economy were going to crash after the hike and that the Fed was going to have to reverse the rate hike. That is not going to happen.

  2. Could you do your best and try to explain, that if the Economy is so good and the Fed didn't raise rates then why only a small blip in the Dow, and why it took 6 to 8 months to get there with the FED funds rate at .25%. Doesn't it strike you as just a bit dubious that with all the manipulation of the market is yet suspicious or worrisome of the future? Could it be that the Market is STUPID and you're a genius?

    1. It's too bad you can't figure this out for yourself. You have a very amateurish view of markets.

      Subscribe to the EPJ Daily Alert, I have explained it there. and I answer all subscriber questions, even from trolls.