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Fed economist tells us to stop looking at equity markets for policy clues

This is from the ICYMI it file - an overnight report from Bloomberg

Julieta Yung, an economist in the research department at the Federal Reserve Bank of Dallas says relying on the equity market for economic signals is a mistake.

  • Short-term fluctuations in equity prices come too fast and furious and are caused by such a multitude of inputs that assuming they'll directly translate into changes in real economic output is an error
  • "The two can disconnect in the short-term because of the immediate effect sentiment has on stocks"

You're response might be "Well, d'uh" ... but apparently policy makers need to be told this stuff.

  • "Then that nervousness wanes, and people capitulate, and that's when you see the market come back."

Yep. Sheesh.

More here from Bloomberg

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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