Yawn.
That is likely to be Wall Street’s collective reaction to the Federal Reserve’s latest policy meeting. The two-day confab, which ends with a policy statement but no press conference Wednesday afternoon, isn’t expected to contain any major changes. The Fed is expected to keep dialing back, or tapering, its bond-buying program by $10 billion. Economists also see the central bank maintaining a cautious stance on the economy.
Investors spent the better part of five years fixated on central-bank policy, thanks to the Fed pinning interest rates near zero and three rounds of quantitative easing. That has changed now.
At the beginning of the year the attention shifted to newly minted Fed chairman Janet Yellen. Investors wondered how she would handle the spotlight at these policy meetings, and whether she would continue the tapering trajectory that her predecessor, Ben Bernanke, had set.
Many of those questions have since been addressed.
“The excitement over Yellen’s first couple of meetings has worn off,” said Cameron Hinds, regional chief investment officer for Wells FargoWFC +0.36% Private Bank, which has $170 billion under management. “It’s clear they are tapering at a $10 billion pace barring some unforeseen development. The economy would really have to go off trend to stop the tapering process.”
That means this week’s meeting isn’t expected to be a market-moving event. There could be some immediate volatility once the Fed statement is released at 2:00 p.m. Eastern Time. Otherwise, the market’s recent grind is expected to continue.
