Fed Turns Dovish and Asset Prices Rise

June 24, 2019

Fed Turns Dovish and Asset Prices Rise Photo

Last week, the Federal Reserve (Fed) replaced its “patience” language with “uncertainties,” signaling a rate cut in the near future if conditions don’t improve. The Fed’s dovish change in posture supported the rise in almost all asset prices as equities, bonds and commodities all rose following the announcement.  In addition to the language change, speculation has grown about the potential for a 50 basis point rate cut during the central bank’s July meeting. 

I continue to believe that you can’t fight the Fed, and easy money policies will support asset prices in the short and medium term. This week continues to be busy with the much-anticipated G20 summit in Japan and the meeting between President Trump and Chinese President Xi Jinping regarding trade.

Tags: Federal Reserve | G20 summit | Interest Rates | Trump

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