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US stock market is near highs



During yesterday’s speech, which leads to today’s inauguration of Biden, future US Treasury Secretary Janet Yellen proposed to act on a big scale in the context of stimulating the economy during the crisis caused by the coronavirus pandemic. As a reminder, last week the President-elect unveiled a plan to support the economy in the form of a $ 1.9 trillion fiscal package, which was greeted with enthusiasm by investors, as was Yellen’s speech. copes with the negative impact of the epidemic only with the help of soft monetary policy, especially since the pandemic continues, and the vaccination process has been launched recently and it is too early to judge its effectiveness. For the dollar, as a defensive asset, this development of events serves as a factor of pressure, contributing to the build-up of devaluation pressure. However, in the longer term, the strategy of the nominated for the post of the head of the US Treasury Yellen is fraught with risks. Aggressive fiscal stimulus will lead to further inflation of debt, an increase in already high deficits and higher Treasury yields. Against this backdrop, some investors are already expressing concern about bubbles in various asset classes, which will sooner or later collapse. At this stage, the US stock indices are close to record highs, which have been updated several times this month alone. Further gains in stocks driven by stimuli will lead to overheating of the market and risk provoking a large-scale correction in the medium term as side effects from the new government’s policies manifest. In this scenario, other regional sites, as well as risky assets in general, will not be able to resist falling .____________________ Mikhail Dorofeev, Chairman of the Board, KPC Obnovlenie

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