Moderator Note: This thread was started with off topic posts moved from Short-Term-TSLA-Price-Movements-2014 and the title was created by this mmoderator not by the OP of the first post shown below. Title may be updated if the discussion develops. ----------------------------------------- The latest statement of Yellen was quite optimistic, as she believe the US economy is recovering and will be able to handle a normalization of interest rates. That was enough for investors to bid up stock prices, as it supported their narrative that the US recovery is strong and a reality. At the same time the Dollar is rallying against the Euro because everybody believes that Europe will follow the U.S. and do quantitative easing, as it has been such a "success" in the US. The reality is that Yellen is all but confident that the U.S. economy will be able to handle higher rates. Just look at her purposefully confusing statement: "Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy. The Committee sees this guidance as consistent with its previous statement that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time" Yellen knew that the market was expecting the FED to drop the wording "considerable period of time" signaling the upcoming rate rise, everybody is expecting. Because of this broad consensus, Yellens hand was forced, as if she would not have dropped the wording, the markets would have questioned the FEDs confidence in the US economy. At the same time she did NOT want to drop the wording, as she is actually not confident at all, that rate hikes will not cause the US economy to come crashing back to down to earth. So really she wants to as much wiggle room as possible and delay this rate hike. So what she does is drop the formulation in the sense that she replaces it with a different wording, but than immediately goes on to say that patient means the EXACT same thing as considerable period. ABSURD! At this point in time she is just playing games with the market. The reality is, that the FED is in between a rock and a hard place. On the one hand they have to continue with the narrative that the U.S. is recovering. Thus they have to pretend that interest rates will be normalized. On the other hand they know that the economy cant handle 6% rates. Either way eventually they will have to introduce QE4: This will mean nominal gains in stock prices like TESLA, crashing dollar, rising commodity prices and eventually interest rate spike to counter out of control inflation. If the FED actually starts raising rates next year I believe there will be pressure on the stock market. If that happens and the economic data comes in worse than expected they will start QE4 and reverse rate hikes. So I do see a correction before the rescue via QE4 arrives, despite the temporary bullishness because of the FEDS narrative of a US recovery.