Watch Janet Not Donald

For the cohort of bankers and analysts on Wall St. who've been steadily watching the FED meeting minutes and addresses to congress over the few years, Donald Trump's administration has given them both a new focus and a renewed focus. These folks watch the minutes (notes) from FED's regular meetings intently as they might provide clues as to when the governing body plans to raise key interest rate benchmarks that underpin the majority of relevant interest rates in the United States. Thus, monetary policy has been a hot topic, although due to budget hawks in congress, this cohort had little to watch for in the way of fiscal policy.

Fiscal policy can be a signal of where the economy is moving and which sectors will likely advance or recede. Mr. Trump's administration has provided plenty of speculation. Prior to his election, people generally believed the markets would tank upon his election in a way similar to the fallout from Brexit in Summer 2016. However, the markets have been rallying since the nation found out it would be lead by a man preaching that we build a wall. There is reason to believe that there will be large fiscal stimulus and with employment nearly full and inflation beginning to gain some momentum, investors expect the FED meetings to get a bit more eventful.

Thus, when Donald Trump addressed congress this week, he likely had investors tuned in. However, investors are more aware of FED Chairwoman Janet Yellen's words that will come Friday. Trump may have brought a close eye to fiscal policy, but he's also brought a more anxious eye to monetary policy.


https://www.economist.com/blogs/buttonwood/2017/03/watch-janet-not-donald