Our discussion last week of the Fed’s confusing position on interest rates drew a number of favorable comments. “This is precisely right,” one reader wrote us. “They should just go ahead and raise rates. The more they delay, the tougher it’ll get.”
But our reference to the economy as a “Goldilocks environment” left at least one reader puzzled. “Loved your article,” this young banker tweeted us, “but was wondering what the state of the US economy has to do with the Three Little Pigs?”
Nursery rhyme confusion seems to be just one of the many symptoms afflicting investors today. Amid numerous cross-signals from both the Fed and the economy, it’s a wonder anyone retains a clear sense of direction.
Bullish signals from governors following their August meeting resulted in the “Jackson Hole rally” in which markets headed higher. But worries about interest rates, oil prices, and corporate earnings have caused the Dow to sink 500 points in the past week.