Since TCJA, one new 2018 hike is expected. Stocks and yields agree it’s not a tightening.
US production moves to all-time highs, yet the global petroleum market keeps tightening.
The Wall Street Journal editorial page has always been appropriately skeptical of the claims of former Federal Reserve Chair Ben Bernanke during the quantitative-easing era. So there’s no reason, today, to let his dubious rationales for QE be a basis for worry about stock prices now that these programs are finally being unwound.
...We’ve been hosting an op-ed debate on stock prices, and last week financial consultant Donald Luskin made his case for the running of the bulls as expected corporate earnings are adjusted upward due to tax reform. Harvard economist Martin Feldstein makes the case for caution nearby, arguing that equity prices are fated to fall as the Federal Reserve reverses its long period of asset purchases and low interest rates, and inflation makes a comeback. Both men could be right, depending on your investment time frame.
We rest our case that the tax cuts weren’t fully discounted. And they still aren’t.