Optimistic valuations

Markets continue to run ahead of fundamentals

A dovish speech by Federal Reserve Chairman Jerome Powell has given a new impetus to the market rally. At the Jackson Hole conference on Friday last week, Mr Powell said the Fed believed inflation, currently running over twice the US target rate of 2 per cent, was “transitory”, and “temporary”. The Federal Open Market Committee may discuss the possibility of tapering its monthly bond-buying programme of $120 billion but a taper is not expected until 2022. Hence, fears of monetary tightening have been allayed. A higher headline gross domestic product (GDP) growth number in the first quarter of this fiscal