- July 9, 2021
- Posted by: Stratford Team
- Category: Business
Concerns over the health of the economic recovery are denting risk sentiment and hitting demand for stocks even as the Federal Reserve moves towards tapering asset purchases.
Inflation concerns and fears that the Federal Reserve could move to start tightening monetary policy have been lingering over the past few weeks, particularly since its hawkish shift at the June meeting.
The minutes from the Fed’s June policy meeting confirmed that the central bank is moving towards tapering its asset purchases, potentially as soon as this year. However, the minutes also revealed that more evidence of a robust economic recovery would be needed to set a more defined timeline for tapering.
Interestingly the minutes come as the bond market continues to show traders are increasingly less concerned with the risk of rising inflation and interest rate rises. This is pretty much the polar opposite of what some Fed policymakers appear to be worried about when…