Stocks and bonds to move up and down for the next several months on Fed’s interest rate outlook
Sam Adelton
Feb. 18, 2007

The stocks and bonds are moving up and down in tandem. The biggest factor influencing them is the Fed’s decision and outlook on interest rates.

The Fed is divided between two groups. The first group is hawkish on inflation. The second group is dovish. Fed will neither raise rates nor lower rates at this time! They will watch closely and try and understand the pulse of the economy.

The economies may have finally fooled the Fed, ECB and other central banks. Every central bank now is thinking in terms of containing inflation. The inflation on the surface is actually deep deflation inside.

The stocks and bond are moving up and down simultaneously on Fed’s interest rate outlook. That is the reason these markets move so fast with volatility when any of Fed members speak.

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