Bernanke testified before Congress today, and I think that investors may be inferring a potential change in the the interest rate outlook. I don't think that he said anything specific, but I didn't hear the entire Q&A. Gold is down sharply, and bonds are falling today slightly. The worst sectors in the market today are Materials and Energy.
I continue to think that the FED is at risk of staying too easy too long - hence I haven't had a problem upping exposures to Energy and Gold in my ETF model and even in Top 20 to some degree. This just looks like a trade for now, but it merits attention. At the first sign that Bernanke is open to earlier rate hikes than three years from now, we don't want to be exposed to pro-inflation investments, at least in the near-term.
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