Transcript:
Tom Vaughan:
Hello, everybody, welcome to Thursday. The S&P 500 was down .6%, today. Broke our three-day record streak, where it was hitting new highs… all time highs every day. And really, what’s happening today is the market is just waiting to see what’s going to happen tomorrow. And so every year at this time, the Federal Reserve and all the Federal Reserve governors get together in Jackson Hole, Wyoming, and they announce what they’re talking about in a speech from the chairman, in this case, Chairman Powell, on Friday; which would be tomorrow. And so everybody’s kind of waiting for that.
They’re not actually in Jackson Hole this year, or last year for that matter, because of the virus happening; so they’re doing this virtually. But nonetheless, the market looks at this as a very important component. I’ve talked a lot about what I see happening with the Federal Reserve and how important the market thinks that is. And you can see very clearly, based on just conversations and comments that they make, what that means. So they’re purchasing $120 billion worth of bonds: This is fairly controversial. This started back in 2008, and they’ve been using this as a stimulus measure, for some time. They obviously would like to eventually cut that back, and maybe even turn it off completely, at some point in time.
So, how they do that… In the past, when they’ve cut back, we’ve had some problems with the market. And so I think they’re doing a better job this time, in terms of really communicating over and over again: When this might happen, how it might happen. But it’s not something that’s that easy to see in the future, especially in this environment. And so again, as I mentioned yesterday, I’m hoping they come out with some flexibility. Maybe some parameters that they’re looking at what have you, and when they would decide, and how they would decide those types of things.
I still think they’re not going to know everything they need to know, because none of us do, at this point in time. Because of this environment that we’re in with the virus; it’s definitely unusual: There’s no doubt about that. So, nonetheless, really interesting. I look forward to seeing those of you who can join me tomorrow, for the Talk Money with Tom show… 12:15pm to 1:00pm on Fridays, Pacific Time. And I look forward to seeing you then, and I’ll do my summary for the week: Kind of for what I see is happening; also at the beginning of that show, so look forward to seeing you. Thank you.