Powell’s position, with the economy in a much weaker state, and with an election only five months away, is even more difficult. But the likely response by the markets, now that he has evidently decided to take the risk of going down in history as another great bubble-blower, will be to inflate a bubble.
That creates a difficulty for investors. There is money to be made in a bubble, providing you get out before it bursts. Acting to take advantage helps to ensure that it inflates. Late 1998 was a terrible time to buy tech stocks on a 10-year view. It was a great time to buy them on an 18-month view. The chances are that many will now focus on the next 18 months.
Tech companies rule the world today. Their presence is felt in everything that we do these days. Be it driving a car or trading or just about anything.
Very different than 2000, where utility of .COM companies was indeed very less.
My personal opinion is that there’s no bubble. At the most FAANG and rest of NASDAQ might just grow slower than today but anything like bubble burst is unlikely. Valuations of tech companies today have a physical existence.
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nice… unlimited money printing