Joe Biden’s financial team could create a giant stock bubble

New York (CNN Business) Federal Reserve Chair Jerome Powell has made abundantly clear that he is more concerned about the challenging job market than the possibility that more stimulus may eventually lead to higher inflation. It’s a view shared by his former boss — Janet Yellen . So with Yellen and Powell set to work closely together again, because she is President-elect Joe Biden’s nominee for Treasury Secretary , do investors need to worry that their policy position might push the already soaring stock market even higher? “Powell has been talking a lot about the labor market and that the healing must include all workers that want jobs. And Yellen is a labor economist,” said Quincy Krosby, chief market strategist at Prudential Financial. “So it’s possible the Fed could be too dovish and let inflation get hotter.” Inflation is not a worry currently. Consumer prices have risen less than 2% over the past 12 months, according to the Fed’s preferred measure of inflation, which looks at personal consumption expenditures. And interest rates are not going anywhere anytime soon. They will be stuck near zero for several more years , according to the Fed’s latest economic projections — which were released… Read full this story

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