After two FOMC interest rate decision meetings and dangling a carrot in front of the markets with comments of much lower rates this year, the US Dollar continues its rally off the December lows. This proves again that central banks are not more significant than the markets. Chairman Powell’s recent press conference resembled a puppet show more than a Central Bank press conference. On one arm was the string being pulled by the current administration to lower rates to create a facade of security for voters wishing to use credit. On the other arm were members of the FED with their divided views on where rates should be. To be fair, the FED has been a puppet for both parties in recent years.

During the January FOMC meeting press conference, a reporter asked the Chairman if he was concerned about the possibility of not being reappointed if the Republicans win the election. His reply was not very convincing; his primary focus was on the economy and not being reappointed.

What surprised me is how gullible the equity markets are and how they are making all new highs. Well, at least the “Magnificent 7” are. Time will tell if there is too much optimism about multiple rate cuts this year.