Does the Fed need to become more dovish?

clock • 2 min read

Financial markets became scared at the end of last year that the US Federal Reserve's monetary tightening could precipitate the country's economy into recession.

The U-turn by the Fed was enough to reignite broad optimism. If a recession is avoided, and interest rates are guaranteed to remain low, then this is enough of a Goldilocks scenario to justify that the S&P index is comfortably back to its highs of September 2018. However, the Fed has only stopped raising rates and has not even started to implement the announced tapering of its balance sheet reduction. What does The Fed's change in tune mean for markets? In the meantime, the US economy has continued to accumulate signs of weakness, particularly in the essential pillar of consume...

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