Billionaire Paul Tudor Jones says the stock market is getting a boost from an “explosive” combination of easy monetary policy in the U.S. and lower taxes. He said he thinks this combination can push the market into record territory.
said Wednesday the stock market is getting a boost from a combination of easy monetary policy in the U.S. and lower taxes.Squawk Box
." "We've got a 5% budget deficit coupled with the lowest real rates that you can image with the economy at full employment. That's the most unorthodox, and potentially explosive, combination that you can imagine. It's like the photo negative of 1930, when we had the last trade war, but you had tight fiscal and tight monetary policy. Now we have the exact opposite."
The Federal Reserve has cut rates three times this year, including last month. Fed Chairman Jerome Powell, who is scheduled to testify in front of Congress at 11 a.m. ET, raised the bar for further rate cuts at last month's meeting, but suggested that rate hikes were unlikely in the near future. The Fed's easing measures followed four rate hikes in 2018, the last of which contributed to a massive correction last December. This reversal helped pave the way for a record run for stocks. Jones believes the rate cuts have made up for any damage from the trade war.
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