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Dan Celia for Townhall.com | The Dwindling Impact of the Federal Reserve

(This post originally appeared in Townhall.com | Image from Townhall)

Federal Reserve Chair Janet Yellen made some interesting comments Wednesday when she announced the raising of interest rates another 25 basis points. The new target range is 1 percent to 1.25 percent, and the current rate is 0.91 percent. Yellen stated that the Federal Reserve would begin its exit from the $4.5 trillion in bonds on its artificially inflated balance sheet. She indicated this exit would be “gradual” and “predictable.”

I, for one, agree with her. I think it is something we have needed to see for some time. If it is, in fact, a gradual exit, it could have little negative impact on the economy and the markets in the short term. However, this also begs the question of whether the Federal Reserve is losing whatever effectiveness it’s had over the markets. By all accounts, the answer is “yes.” With the markets at all-time highs, the rise in interest rates does not appear to be cooling off Wall Street. Continue reading…