JAMIE MCGEEVER: Fed’s talk as important to markets as action
As trading is forward-looking, policy guidance from officials is a strong driving force for investor behaviour and asset prices
27 September 2024 - 05:00
Orlando — As former Federal Reserve chair Ben Bernanke used to quip, “monetary policy is 98% talk and only 2% action”. Perhaps his numbers were a little exaggerated, but the financial market impact of policymakers’ signals can undoubtedly be just as powerful as their actual decisions. If not more so.
Markets are forward-looking. It’s one of the fundamental pillars on which they’re built. So it should come as no surprise that policy guidance from Fed officials is such a strong driving force for investor behaviour and asset prices...
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