How will the market move with FRB’s “tapering acceleration”?
ReferenceWhat happens with the Fed's "tapering acceleration": Nikkei
In the FOMC, markets can move significantly, or trend can change.
The media focuses on inflation trends, the Fed's policy, and now tapering and rate hikes as the main topics.
However, there are few explanations on how these factors affect stock prices, bonds, and exchange rates.
When I was working at an asset-management company, a salesperson once whispered, “There are many statistics in the United States, so why is employment data the one that gets so much attention?” It was something you couldn’t ask again.
To my surprise, even famous economists didn’t understand it. In a certain magazine, a certain economist wrote about “why employment statistics are in focus,” but he wrote long-winded, off-target things. This wouldn’t satisfy salespeople. Indeed, it isn’t written in economics textbooks, so even studying economics might not make it clear.
To get to the point, tapering acceleration is now a hot topic, but there is little basic information on how it will move the markets. It seems obvious to say it doesn’t require explanation. Perhaps it means: this is obvious, please figure it out yourselves? But without that, even if you obtain information about U.S. monetary policy, it won’t be useful.
The market is delicate. It isn’t straightforward. Still, the basic sense of how tapering acceleration will affect the market is as follows, which is now timely information.
For professional investors, this is common knowledge, but if you are swayed by the media, you might not even consider such basics, so just in case.