Investors are eyeing closely the Brexit vote and the partial government shutdown as strong bank earnings lift stocks.
The growing consensus that the Federal Reserve will keep interest rates at its current level and not push for additional hikes this year may be driving the stock market to trade higher.
“The Fed’s propensity to tighten monetary policy over the course of the next six months is simply gone by the wayside,” The Gartman Letter Publisher Dennis Gartman told FOX Business’ Neil Cavuto on Wednesday. “It’s just not going to happen.”
Policymakers at the U.S. central bank have taken a step back since their last rate hike of 2018.
Richard Clarida, vice chairman of the Federal Reserve, affirmed his optimistic outlook for the U.S. economy in 2019 and reiterated the Fed’s patient approach toward rate hikes.
“We think we can afford to be patient in our meetings this year as we assess the appropriate policy,” he said in an exclusive interview on FOX Business on Monday.
Stocks ended lower last year after the Fed raised the benchmark federal funds rate for the fourth and final time in 2018. The central bank’s decision to hike rates gave rise to an estimated 20 percent decline in equity value, according to Gartman.
“I know the Fed is not supposed to look at the stock market, but darn it, it does,” he said.
Gartman said the Fed’s previous actions have likely been detrimental to the economy.