Since the end of the great recession, investors focused importantly on one key driver to the economy and financial markets—monetary policy. Commentary before and after each quarterly meeting of the Fed and FOMC generated a good living for economists over this decade. And both Ben Bernanke and Janet Yellen became television stars as a result of the “Press” conference that followed.
With the arrival of the Trump administration, Janet Yellen and monetary policy will need to share the spotlight with the rebirth of fiscal policy and its broader group of fiscal policy stars. The result will be a more diversified focus by investors as they try to perceive the forces that will effect both the economy and financial markets. The question for investors will be how smooth will this hand over be. So far investors assume a smooth handover---an assumption that may lead to disappointment.
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