Janet Yellen may not be able to wage military war, but she can move markets, every market.
Following the release of the Federal Reserve’s meeting minutes, the Chair held a Wednesday press conference and surprised investors of all asset classes. Instead of hinting rate increases, Yellen was dovish and said the Fed was cautious because of dollar strength, lower than ideal inflation and a struggling labor market. Afternoon stocks rallied, bonds rallied, gold rallied, but the dollar fell. It was clear a strong dollar was getting in the way of inflation and exports, which worries the Fed as a factor impacting GDP.
The charts below highlight the power of the Federal Reserve. Each showcases the asset reactions after the release of meeting minutes. Each also shows the influence not only of the minutes, but of Yellen’s interpretation as well.
S&P 500
Dow Jones Industrial
NASDAQ
WTI Crude Oil
Gold
Dollar
10-Year Treasury Bond Yield
And Volatility
Charts courtesy of Yahoo! Finance