Home Markets The Fed Pulls Back on Its Ultraeasy Stance. Volatility May Follow.

The Fed Pulls Back on Its Ultraeasy Stance. Volatility May Follow.

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It’s summertime, but the living may not be easy, at least for the financial markets.

The summer solstice arrives in the Northern Hemisphere on Sunday at 11:31 p.m. Eastern Time, and the main priority for everybody cooped up by Covid-19 is to get out and go somewhere—anywhere. In ages past, that typically meant that financial markets entered the doldrums, which sailors associate with the season. That has been less and less the case in recent years, and this summer shapes up to be less than tranquil for the markets.

Credit or blame the Federal Reserve, which this past week signaled an eventual move away from its current ultraeasy monetary stance. While the Federal Open Market Committee made no current policy changes, its so-called dot plot of the members’ guesses about the future federal-funds rate target showed two one-quarter percentage point increases by the end of 2023. In its previous set of dots released at the March meeting, the median…

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