Fixed Income Perspectives

Voya
By May 18, 2022 14:28

Fixed Income Perspectives

Is This What “Unprecedented and Extraordinary” Actually Feels Like?

Unprecedented and extraordinary. For more than a decade, this was the description for actions taken by the Federal Reserve to keep the economy—and by extension, risk assets—on track. If you wanted to evaluate macroeconomic risk, Fed policy was your measuring stick. Interpreting Fed minutes became a full-time job for some market participants and media pundits. There is nothing markets hate more than uncertainty, and for a very long time, the Fed mitigated investors’ fear of the unknown by answering every shock to the system with more “unprecedented and extraordinary” measures. Over time, these measures felt more like the norm than the exception. That era is over. The new measuring stick of macroeconomic risk is inflation. We expect the Fed will do everything in its power to avoid surprises. But the ball isn’t in its court. The market knows that the Fed must control inflation. What it doesn’t know is whether the Fed will be successful. As investors grapple with this new source of uncertainty, we expect th

Voya
By May 18, 2022 14:28

SEARCH