The equity and bond markets ended the first three months of 2019 with gains. The headlines attribute this to the Federal Reserve who, they say, said they will not raise interest rates in the near future. It’s not April Fool’s Day anymore, but this explanation is no more accurate than a bad joke.
I offer only one piece of evidence, but I could offer countless more recent examples. If you believe the Federal Reserve controls interest rates, please read the autobiography of one of the Fed’s most powerful chairmen in history, Paul Volcker (Triumph of Persistence). If there was ever a time when the Fed was active, it was during his tenure in the early 80’s. Interest rates on home mortgages were in the mid-teens. The Fed attempted to lower rates (twice) and rates rose instead. Then the Fed raised rates, and guess what happened?