The US Stock Market Dodges the Federal Reserve Bullet Once Again

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By Jacob Maslow

Federal Reserve, Washington DCWith the latest guidance from the US Federal Reserve, it appears that the raging bull market in the United States has survived once again. However, it is interesting to note the language of the Federal open market committee notes. While they dropped the “patient” language, they did give some indications that the US Federal Reserve would be data-driven.

On one hand, this doesn’t really mean anything. I mean, the whole point of the US Federal Reserve is that they should pay attention to the wide array of data points that the US economy is throwing off. This doesn’t really say anything. However, it does indicate an attitude that the Federal Reserve would be more sensitive to data changes. Now, this opens another line of questioning as to how sensitive the US Federal Reserve can be.

If you have been paying attention to the employment figures in the United States, there is a general trend, but there are often unexpected hiccups. Jobless claims can spike up dramatically, and they can drop off substantially followed by a nice little spike. I am guessing that the data sensitivity of the US Federal Reserve would discount temporary blips and focus on the big picture. At least that is the hope. Still, this language does indicate that the US Federal Reserve won’t be raising interest rates anytime soon.

From a certain perspective, this is actually the worst kind of news. It would mean that the market speculators overheating the US equities market are given another lease on life. Expect riskier and riskier investments to be made. From a certain perspective, this means that the current US equities bubble will continue to get larger. This will make the pain of a stock market crash even worse once it eventually comes.

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