It is a fact that the U.S. Federal Reserve bank has been calling the tunes in the financial markets for the last five years. This week, Fed Chairwoman Janet Yellen expressed optimism that we can expect future economic growth over the next two years.

That was just what investors needed to hear. There had been some concern that this year’s harsh winter was not the only factor that resulted in a negative first quarter. Some suspected that the Fed’s $10 billion per month drawdown of stimulus was hurting economic growth. That does not seem to be the case, according to the central bank’s prognosis.

The fact that recent inflation data hinted at an uptick in the inflation rate was also disputed by the Fed. They acknowledged that inflation was a bit stronger than expected recently but dismissed it as "noise." Yellen went to great lengths to reassure markets that there was no predetermined set date for the Fed to increase interest rates and even hinted that rates might remain low for much longer than the market expected.

Her comments were enough to send the S&P 500 index to new highs. Investors have built on those gains through the remainder of the week. The move higher was even more impressive in the face of increased geopolitical tensions in Iraq and Ukraine.

Higher oil prices are the main risk to increased tensions in the Middle East. As it is, West Texas Crude is now above $107 per barrel. If the Shite/Sunni warfare causes prices to spike further, it could have a dampening effect on economic growth. Already, pump prices are climbing just as the summer driving season gets underway.

Over in the Ukraine there are reports that Russia is sending tanks over the border. No one knows whether this is just another chess move by Vladimir Putin to psyche out the recently-elected Ukrainian government, or the start of something bigger. Through it all, the stock market has forged ahead.

The price of gold (considered a safe haven in time of conflict) has suddenly spiked. It could simply be a technical move brought on by short covering, or a real response to the rising tensions worldwide. It is too early to know, but the precious metal markets should be monitored closely for any further gains.

However, you would think that if investors were truly concerned, there would be a flight to safety to the ultimate safe haven, the U.S. Treasury markets. But bond prices have actually dropped and interest rates risen this week. Go figure.

It appears that American investors are strictly focused on the low interest rate, easy money policies of the central bank and anything else is a minor distraction. At best, these conflicts furnish a wall of worry and we know that markets love to climb such barriers.

As the U.S. indexes continue to make record highs, I advise readers to remain invested, while beginning to buy any dips in the European markets over the summer with your excess cash. As for the market pullback I have been expecting, I remain cautious that a pullback is still likely, but also recognize that the time for my original pullback has come and gone. The S&P 500 is a good 50 points above my target. Practicality demands I reassess my stance in the days to come.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Schmick’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Schmick at 1-888-232-6072 (toll free) or e-mail him at Bill@afewdollarsmore.com.