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President Trump speaking at the United Nations

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The Market Wrap for September 22: Astounding Escalation in Rhetoric

Asif Imtiaz Sep 22, 2017

President Trump’s economic nationalism-centric speech at the UN with his threat to “totally destroy North Korea” sent markets into a tizzy this week, but a measured response from world leaders later helped cool the situation. China, a key player in the North Korea quagmire, called for calm and British Foreign Secretary Boris Johnson reassured investors by saying “none of the military options are good.”

Regardless of how upset political pundits were after Trump’s UN speech, it has been a long time since the markets have learned to discount his rhetoric.

Although the markets continue to make new highs, after it became clear that the recent tropical storms will actually cause inflation to go up due to a jump in gasoline prices, it is predicted that the Fed will stay on course and increase key interest rates one more time in December. Regardless, bond yields slightly went up this week and investors should expect higher yields going forward.

As southern refineries gradually resume production and the markets continue to show signs of strength, the summer is going to end on a positive note after all. However, with an unpredictable commander-in-chief in office, it is hard to tell how things may end.

Be sure to check out our previous week’s edition here, in which markets breathed a sigh of relief after Hurricane Irma made a weaker-than-expected landfall.

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