The stage is set for the presidential election and the Fed will try its best to not influence it (that is, unless Hillary Clinton is losing).
At its most recent meeting - which ended this past Wednesday with the usual "no change" announcement - the FOMC decided that there wasn't enough positive economic data to support raising rates, despite record low unemployment according to official sources.
Thise in the know understand that the Fed cannot and will not (the next meeting is scheduled for November 1-2) raise interest rates prior to the election (November 8) because any increase, such as the lonesome one of 0.25% back in December of last year, would cause a market panic and sharp selloff of stocks.
The condition is asinine, akin to preparing a race horse for racing and then continually scratching the nag before the event.
Members of the Fed continue to jawbone about raising rates, which keeps their fragile authority intact. The truth is that they lost control back in 2008, and have done nothing to retain or repair the confidence of the populace, though, due to normalcy bias, everybody keeps using fiat money and going along for the zero interest rate ride for the time being.
These policies cannot last forever, thus it may become fashionable and even predictable to vote for Donald Trump in the upcoming election. Trump is a change agent, one feared in the halls of congress, statehouses and even in the conference rooms of the Fed's Eccles building.
Stocks are overpriced because there is no alternative for many large investors, and that's a danger.
So, get ready for a rocky road ahead. The first presidential debate is Monday, and that event could change the dynamics for November and the immediate future.
Stay tuned and stay liquid.
Friday's Closing Prices:
Dow Jones Industrial Average
18,261.45, -131.01 (-0.71%)
5,305.75, -33.78 (-0.63%)
2,164.69, -12.49 (-0.57%)
10,717.99, -75.67 (-0.70%)
Dow: +137.65 (0.76%)
NASDAQ: +61.18 (1.17%)
S&P 500: +25.53 (1.19%)
NYSE Composite: +185.72 (1.76)