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Should Janet Yellen Come Down to the Trading Floor?

Sunil Swami, Chief Investment Officer | SEP 29, 2015

Janet Yellen is a superb economist and great leader as Chair of the Board of Governors of the Federal Reserve System. However, communicating the Fed’s monetary policy is tricky and more an exercise in psychology. Traders are emotional and have a tendency to drive markets to extremes in either direction.

On Thursday, September 17th, Ms. Yellen talked about weakness in the Chinese economy and how it might affect economic growth as one of the reasons the Fed decided not to raise interest rates. In our opinion, the market is now overly focused on China and its implications for the global economy, something over which Ms. Yellen has no control. Stocks are down hard since the Fed’s announcement, and volatility shows no signs of abating.

Ideally, Ms. Yellen would walk back the China fears and regain control of financial markets by focusing traders on the U.S. economy, jobs and inflation.

This article is provided for informational and discussion purposes only, is not intended as an offer or solicitation for the purchase or sale of any financial instruments and should not be relied upon as an investment recommendation. Alerus Financial, N.A. and its affiliate subsidiary companies make no representations or warranties as to the accuracy, completeness or timeliness of the information. The information is not intended to provide legal or tax advice. Individuals should consult a qualified legal or tax advisor for advice specific to their circumstances. 

About the Author

Sunil Swami, Chief Investment Officer

Mr. Swami has decades of experience in the investment management and related fields.

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