Is the Bond Rout Over?

While the Trump-fueled rally continues, the Fed’s been keeping a relatively low profile lately.
Maybe it’s the New Year or maybe it’s just analyzing the incoming data to determine whether last meeting’s hike did the trick. Or maybe it just doesn’t want to rock the boat ahead of the president-elect’s inauguration since the Fed’s not all that popular with him. In any case, since its last meeting and rate hike in December, the Fed and Janet Yellen have been pretty quiet.
Don’t get me wrong, Fed officials are still making scheduled speeches. In fact, just this past week, there were nine of them! It’s just that they seem to be extra guarded.
Perhaps Yellen and her colleagues know they’re mostly powerless when it comes to regime change at the Fed. Waiting is their only play for the time being. Whether they sit on their hands or not, there are movements to keep track of, because those fluctuations can mean big profits.
Not only did the president-elect launch attacks on the Fed and Janet Yellen specifically during his campaign, but earlier this month, Senator Rand Paul (along with eight co-sponsors) reintroduced his Federal Reserve Transparency Act. The legislation is widely known as the ‘Audit the Fed’ bill aimed at preventing the Fed from concealing vital information on its operations from Congress. Fed Chair Yellen believes the Fed will lose independence (and perhaps some power) with passage of the bill.

This post was published at Wall Street Examiner on January 13, 2017.