CQ Roll Call May 21, 2013 | Register

Markets Worry as the Economy Shows Signs of Recovery

Posted at 10:15 a.m. on March 13

The Wall Street Journal looks at how investors are preparing for the economic recovery and the eventual movement by the Federal Reserve towards unwinding its extraordinary monetary policies.

“Rather than trying to guess exactly when that moment will happen, they are pre-emptively making investments that will pay off when it does… But portents of painful losses came in January, when investors began worrying that the Fed might end its bond buying sooner than previously expected… Upbeat news about employment Friday has helped stoke expectations that the economy is continuing to recover.”

“The fear is that as expectations of rate increases mount, short-term investors will bolt for the exits as prices drop, causing wild price swings and amplifying losses.”

1comment
Economy, Financial Markets

Headlines

  • DemInExile

    Maybe a financial transaction tax would 1) punish these short term traders, 2) have no real effect on long term investors, 3) smooth out these predicted gyrations, and 4) generate some cash for the gov, reducing the deficit, thereby making everybody happier! (except the GOP who loses their key excuse for cutting SS and Medicare)

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