Here’s What Investors Should Expect In The Near Future

Andrew Bodner |
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Double Diamond - Market Brief 1/15/21

  • Fed Chairman Jerome Powell committed to effectively monetize any and all government spending.

  • The Fed set its fed funds target rate near zero and is injecting $120 billion per month into the financial system by making securities purchases

  • Upcoming financial stimulus is a positive for the market as people will spend most of what they receive

  • The new Democratic government could add another $1 trillion on top of the $900 billion passed in ‘20

  • Rates are rising because fed borrowing is theoretically inflationary

  • Dems envision restoring top bracket of 39.6% for married couples earning above $466,000

  • President elect Biden’s plan also calls for taxing dividends and cap gains at ordinary income rates

  • Two Fed presidents (Patrick Harker of Philadelphia and Raphael Bostic of Atlanta) this past week raised the possibility of the central bank beginning to pare its $120 billion monthly securities purchases later this year.