be_ixf;ym_202105 d_07; ct_50

Select Page

Loose Money Policies Make Today Look Like the ‘90s

Loose Money Policies Make Today Look Like the ‘90s

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:

According to the National Financial Conditions Index, the Federal Reserve's tightening process hasn’t had an impact on the markets yet.

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


Newsletter Sign Up




“Loving the 238% gain after I bought your recommendation in Sept. 2019! This week (July 21, 2020) will be my 1 year anniversary with your amazing team … thanks for the life-changing work you all do! Between all your services, 14 triple-digit gains, the greatest at 358%!"

- Matt

“At the end of August [2018], my 401K was $659,000. Now, on September 4th [2018], it’s $715,000. My account is up $56,000 in the last 5 days!”

- Warren O

"You have done once again!! You are reminding me of the GREAT Joe DiMaggio with your consistent hitting!! You knocked this one out of the park!"

- Keith S.

Share This