So, there is nothing in FED Chair’s speech which suggests US economy is in good shape.
He literally said that both unemployment and inflation risks are to the upside, and with funding rate they can tame either one or another but not both simultaneously.
So as I said earlier US economy is in very confused state, and FED policies only can affect it to certain extend. Real economy healing should come from the government policy. And it is not happening for now.
Handing out cash to household and businesses is not a sustainable solution to complex economical problems. We will see with what other measures current administration will come up next year.
Assumption that liquidity injections pumps market prices is not always holding. It does so only in relatively healthy condition. In uncertain environment investors can decide to just hold on to cash and safe investments.
In the meantime Bank of England came up with the report suggesting global economy is in pre-crisis state.
Any of this means economy is going to collapse next month or in a year, it rather suggests that situation is uncertain and to produce a big move markets require more information.
