Markets Respond To Fed Minutes

Markets Respond To Fed Minutes

As is becoming the new norm, Wall Street all but pauses to linger over the Fed’s most recent announcement regarding monetary policy.  As we’ve come to learn over the past several months, the state of the market and monetary policy are irrevocably linked.  Investors fear the day that the Fed decides to pull out of monetary easing allowing the economy to forge its own path.

Fed Says Monetary Policy Will Remain Accommodating

markets respond to fed minutesIn the recent Fed announcements on Wednesday, Bernanke made the announcement that the Fed minutes would remain “highly accommodative” for the foreseeable future.  Investors breathed a sigh of relief after the announcement because many had anticipated that with the improving job reports, improving housing market, and overall healthier economy, the Fed had been hinting since May that it might be time to start tapering off the $85 billion/ month in bond buying program.

Can The Economy Withstand The Fed Pulling Out Of Monetary Stimulus?

The biggest concern out there is whether or not the economy will rebound after the Fed finally decides to pull out of monetary easing.  In June when the Fed hinted they may begin tapering, the markets dropped 6% almost overnight.  Obviously, investors are watching the Fed very closely to determine what they should do with their assets in the stock market.

Markets Respond To Fed’s Announcement

Following the announcement yesterday, the U.S. stock Futures were up by around 1% and markets around the world rallied.  However, the U.S. stocks finished a little mixed, because after the minutes were released it showed that officials from the Fed are mixed on when to end QE.

As an investor, these are some volatile times for the markets, and one miscalculation regarding the markets or the Fed could send your investments into a tailspin. As a result, it’s extremely important that your portfolio remains well balanced and ready to weather whatever lies ahead for the markets and the economy. In order to stay ahead of the turning markets, speak to a Redhawk Wealth Advisor near you today.

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