Why the Stock Market Is Afraid of the Fed
The stock market saw continued volatility on Wednesday morning. Market participants tried to get their bearings amid conflicting signs from Washington, Wall Street, and the broader U.S. economy. Although there's still a lot of optimism about the potential for a full economic recovery from the coronavirus-provoked recession, some wonder whether that recovery will come as quickly or be as strong as hoped. As of 10:30 a.m. EDT, the Dow Jones Industrial Average (DJINDICES: ^DJI) was up by 14 points to 32,840. However, the S&P 500 (SNPINDEX: ^GSPC) had dropped 15 points to 3,948, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) was down 86 points to 13,386.
A lot of stock market investors lately have been looking closely at the Federal Reserve, which will conclude a two-day meeting this afternoon to give its latest reading on the economy and the future course of its monetary policy strategy. As the market goes through the first anniversary of some dramatic steps the Fed took during the worst of last year's crisis, some wonder whether the central bank will be able to dictate how financial markets respond as effectively in the future.
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Source Fool.com