Quote:
Originally Posted by Didace
It's been happening forever. But it's only a short-term situation. Traders vote that rates going up (or not going down as fast as they hoped) will dampen profits so share prices go down. But, as time moves on, profits get counted and share prices go up.
Yes, clearly the extremes inform the mean, there is profit taking, etc. And the market is constantly "calibrating."
I guess what I am saying is, it seems to me that if the unit of measure with which the calibration is performed gets expanded and contracted exogenously, then we add confusing complexity and dynamics to the calibration process.
I suppose one could argue that it is not exogenous if the Fed follows its mandate and is really data driven. But then, why not just implement an algorithm?
TLDR: my same story --> rates should be set by the market. I posted because I was inspired by the employment data and price action.
