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Yellen Back In Focus, Gold Reacts Poorly

By Matthew Kerkhoff

 

At last the market’s focus is shifting back to where it ought to be, economic fundamentals and the outlook for corporate earnings. That, and of course central bank policy, which recently took a back seat to fireworks in Greece and China.

 

Yellen testified in front of Congress this week and her message was clear. She prefers the risk of an early rate hike or two over the risk of waiting too long and having to play catch-up.

 

This approach should resonate well with investors, at least those who have studied history and care more about the long-term health of our economy than juicing the markets for all they’ve got.

 

We’ve been conditioned to fear rate hikes, because in our past experience, once rates start rising, they do so quickly, eventually reaching a capitulation point that precedes the next recession. This is how central banks have treated us in the past, so our ... Log in or subscribe to continue reading.


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