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“Fed Taunted By RRG’s Explosive Growth In Stocks!

As evidenced by recent data from the Reynolds Retirement Group (RRG), the explosive growth in stocks over the past few weeks is taunting the Federal Reserve. A clear pattern has emerged in the form of a stock exchange that suggests investors are increasingly disregarding Federal Reserve warnings about possible asset bubbles. The data collected from RRG (Reynolds Retirement Group) indicate that stocks have jumped to an all-time high, despite concerns that the market may be overbought. The RRG data show investors in the wake of the pandemic are increasingly transitioning from Treasurys and savings accounts into riskier investments, hoping to beat the negative yields on the former. This shift is even being seen among retirement investors and those whose holdings were traditionally more conservative. Another effect seen is that the yield curve steepening. This is a trend where bond funds with shorter maturities are paying higher yields than longer maturities. This is a sign of a higher-inflation sentiment in the market. The Fed has expressed its concern that this is creating an asset bubble. It has taken the extra step of warning investors about the unpredictable nature of current stock market conditions. Unfortunately, there appears to be no stopping the momentum of growth in the stock market. Whether or not this is a sustainable trend is up for debate. Although the Federal Reserve has thrown its weight behind a more conservative approach, it is difficult to ignore the optimism of investors who remain undeterred by the plethora of risk. The RRG data suggests the Federal Reserve is up against a formidable force. As long as the stock market continues to surge and put on a display of gains, the risk of a popping bubble looms large. Until the market can be calmed, all that investors, Federal Reserve, and those with retirement accounts can do is brace for the unknown.