Isn’t there somewhere in the thinking of speculators some logical mistake…?

It truly is a phenomenon this mister Trump. One would say that when the financial markets were good one week or even longer still distressed from the (possible) raising of the interest rates of the American central bank the Fed that was coming up, possibly even from the key Dutch elections that were getting closer he is going to, today, after the meeting of the Fed and after the elections, be paying enough attention to all of it. But no. Eight out of ten last global news of the financially focused news agency Reuters has “Trump” in their title. I don’t remember that it would ever – whenever – as far as is the memory of the current generation trading on the financial markets reaching be one man considered to be that crucial in influencing of the economy of the world. (To consider somebody crucial and be that person who can actually influence something are two completely different things.)

So despite the fact that the investing community is acting today like the recent events have already been forgotten, they are still important to us. Foremost the stocks took the raising of the interest rates by the Fed as a confirmation that the American economy is doing well to which they reacted by jumping to new all-time maximums. Let’s note: Whenever when some significant bank of the world (the Fed, ECB, BoE and others) announces that it is going to keep loosening the monetary politics stocks take it as a great thing because the flow of cheap money will continue and so they grow. And whenever when it is announced that the monetary politics will be getting stricter the stocks take it as a great thing because that must be a sign of growing economy. Isn’t there somewhere in the thinking of speculators some logical mistake…?

The question trembling in between the lines is if the speculators are not perhaps overreacting once again. Actually, we have already answered that question. Considering that the stocks are currently reacting in the same way to entirely contradictory signals it doesn’t seem to be completely rational. Moreover, the Fed was heard to say that even though it is raising the interest rates now and therefore fulfilling the expectations imposed upon it, it is not intending to overdo it with another raising of the interest rates to the future and that the pace of raising is going to be only “gradual”. It is hard to say what we can imagine by that, it can freely mean that only one more raising is going to happen this year at most. So is there even a real point in dealing with the fact that some country even if it’s the world’s biggest economy is going to raise the interest rates during the year by half of percentage point in total? The financial world – based on the scale of the reaction – is obviously thinking that yes even though from our point of view it is like spitting into the Atlantic.