Markets are exploding higher today.
The Dow is up 170 points or 1.1%.
At 1,704, the S&P 500 is up 16 points or 0.9%. It’s all-time high is 1,709.6.
This bullish move is coming in the wake of Larry Summers’ withdrawal from the race to become the next Chairman of the Federal Reserve.
“Larry Summers’ withdrawal from the race for Fed chair will likely be interpreted by markets as bullish for US interest rate curve trades, duration more generally, and risk assets (including credit and equities),” said PIMCO’s Mohamed El-Erian in a post for Business Insider. “It may also impact the manner in which the outcome of this week’s important Fed policy meeting is interpreted by markets.”
For the most part, experts think this is a one time thing.
“[W]e do not think that the Fed’s policy stance is likely to change significantly as a result of a new Chair being elected, whoever is appointed,” said Capital Economics’ Jessica Hinds who says the positive market reaction may not last. “We’re not convinced that Yellen, if she is selected, will take a much more dovish approach than Summers might have done.”