Powell did exactly as expected. If he started raising interest rates to taper off inflation then borrowing money becomes more difficult. The issue that many investors have is fear of hyperinflation. Powell has basically said that inflation is up but not enough to justify raising interest rates. He's said this on quite a few occasions.
Just a note on what's happening; what we're seeing is exactly what occurs at the start of a new business cycle after a recession. Fiscal stimulus is generated to increase consumer demand. As demand picks up, prices begin to increase. This is when we would see the Fed start to raise rates inline with inflation. More jobs become available and unemployment drops. The issue is that jobs aren't back to normal yet and the amount of stimulus that has been generated is going to show increases across a raft of different areas in the economy. GDP will recover fairly sharply as it did in the December quarter in Australia. The Feds roll in this is to determine if these increases are demand driven or stimulus driven. Powell is stating that it's too soon to act on interest rates because this is not demand driven. Nevertheless, money is being moved in anticipation of rate increases.
Growth stocks will continue to come out of favor but when they drop too far support will come in particularly because most of the growth stocks are intertwined in everyday life e.g. Netflix, Google, Square, AfterPay, Z1P.
Also worth noting is that the recovery in SE Asia will follow China's lead rather than the US.
IOU Price at posting:
50.0¢ Sentiment: Buy Disclosure: Held
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