So, the market keeps "correcting." Some of this is good, simply because the market was overvalued. It was overvalued, because interest rates were too low. Brokers could borrow cheap money, get good, quick returns on it, pay off the interest and pocket the growth. The concern now is that the Federal Reserve will raise interest rates.
The Fed will likely raise rates, because the GOP Congress just passed two massive stimulative measures. The GOP tax cut will give the very rich a massive pay-out, which could further inflate a stock or other investment bubble. Preventing bubbles is part of the Fed's mandate. Also, the spending bill that was just passed will pump hundreds of billions of dollars into the economy at a time when we really don't need more stimulative spending.
The tax cut and the spending bill are highly stimulative and inflationary, and the Federal Reserve will have to act accordingly (unless they don't, because they are dominated by Republicans who will take a YOLO attitude towards bubbles).
From a macroeconomic standpoint, the bills passed by the GOP Congress are just bad policy.
Not that this has ever stopped them before.
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