As the announcement came that interest rates would see yet another 75-basis-point hike at Wednesday’s Federal Reserve Open Market Committee (FOMC) meeting, the stock market did something predictable: it fell. It’s no secret that equity markets have been on a downward slide for most of this year. What flies under the radar, however, is the Federal Reserve’s role in the stock market’s turmoil. And it goes beyond even actual policy.
While the U.S. central bank has had a veritable stranglehold on stocks for years, lately the leash has been shortened dramatically, with even minor monetary news items substantially affecting equity markets.
This reflects a greater economic trend, one that casts the Fed as the puppet master in the stock market’s volatility the past few years.
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