- The Fed is mostly focused on conditions in the real economy, loosening policy when growth slows and tightening when the economy grows too hot.
- It only takes on board financial market conditions when these become more extreme.
- However, because changes in Fed policy have a much more immediate and dramatic influence on financial markets, the financial community parses every word of every Fed official.
- This isn’t a problem when financial markets and the economy are aligned. However, when they are not, this can become a serious problem for investors.
A Looming Disconnect Between The Economy And Financial Markets
July 1st, 2019 · No Comments
Tags: Monetary policy