With the Federal Reserve on track to hike rates three to four times this year, everyone is worried this tightening process will spook the markets.
But, according to the Chicago Fed’s National Financial Conditions Index, it hasn’t had an impact yet.
Take a look:
As you can see, spikes in the index correlate to the gray-shaded areas, which mark economic recessions. The zero line (the black horizontal line) marks the level at which policy is considered tight if it’s above, or loose if it’s below.
Right now, the index is near where it was during the economic boom in the ‘90s.
To put this in context, loose financial conditions are a positive for the economy, as they boost lending and encourage spending, whereas tight financial conditions limit lending and curb spending.
At the moment, financial conditions remain relatively loose, and therefore continue to act as fuel for the economy and the bull market.
Until this changes, stocks are your best investment.
Chad Shoop, CMT
Editor, Automatic Profits Alert
P.S. 1,700 Americans become millionaires each day. That’s one new millionaire every minute. Our team at Banyan Hill is serious about helping you join the “millionaire’s club,” which is why we want to meet you in person at our annual Total Wealth Symposium in Fort Lauderdale, Florida. This exclusive event will be held on September 21-23 and will feature an army of elite investment experts who are ready to reveal their best secrets and strategies. I’m confident that this event will be the most profitable three days of your life. Seats are limited, however, so click here to get your ticket now before this life-changing event sells out.